ANNUAL REPORT & ACCOUNTS For the year from 1 July 2018 to 30 June 2019 (audited) Janus Henderson Horizon Fund 2 Rue de Bitbourg L-1273 Luxembourg Grand Duchy of Luxembourg RCS: Luxembourg B 22.847 Incorporated in Luxembourg as an open-ended investment company with variable capital organised as a Société d’Investissement à Capital Variable (SICAV) qualifying as a UCITS (Undertaking for Collective Investment in Transferable Securities). No subscriptions can be received solely on the basis of this report. Subscriptions are only valid if made on the basis of the current prospectus, supplemented by the latest audited annual report and the latest unaudited interim report, if published thereafter and of the relevant Key Investor Information Document.
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AN
NUA
L RE
PORT
&
AC
CO
UN
TS
For the year from
1 July 2018 to
30 June 2019
(audited)
Janus Henderson Horizon Fund
2 Rue de Bitbourg
L-1273 Luxembourg
Grand Duchy of Luxembourg
RCS: Luxembourg B 22.847
Incorporated in Luxembourg as an open-ended investment company with variable capital organised as a Société
d’Investissement à Capital Variable (SICAV) qualifying as a UCITS (Undertaking for Collective Investment in Transferable
Securities).
No subscriptions can be received solely on the basis of this report. Subscriptions are only valid if made on the basis of the
current prospectus, supplemented by the latest audited annual report and the latest unaudited interim report, if published
thereafter and of the relevant Key Investor Information Document.
Who are Janus Henderson Investors?
Janus Henderson Investors exists to help clients achieve their long-term fi nancial goals.
Our active management off ers clients the opportunity to outperform passive portfolios over the course of market cycles.
With more than 360 investment professionals, we provide access to some of the industry‘s most talented and innovative thinkers,
spanning equities, fi xed income, multi-asset, and alternatives, globally. Our investment teams blend insight, originality, and precision
with rigorous analysis, structured processes, and robust risk management. We build client partnerships on openness and trust,
channelling expertise from across the business and communicating the views of our experts in a timely and relevant way. As at
30 June 2019, we had €316.0bn assets under management, more than 2,000 employees and 28 offi ces worldwide. Headquartered
in London, we are an independent asset manager that is dual-listed on the New York Stock Exchange and the Australian Securities
Exchange.
1
Management and Administration Page 2
Directors’ Report Page 4
Market review Page 5
Ten Year Highest and Lowest Net Asset Value Per Share Page 7
Combined Statements Page 28
Bond Funds
Core Credit Fund Page 31
Emerging Market Corporate Bond Fund Page 36
Euro Corporate Bond Fund Page 44
Euro High Yield Bond Fund Page 55
Global Corporate Bond Fund Page 64
Global High Yield Bond Fund Page 69
Strategic Bond Fund Page 79
Total Return Bond Fund Page 87
Regional Funds
Asian Dividend Income Fund Page 102
Asian Growth Fund Page 110
Euroland Fund Page 116
European Growth Fund Page 124
Japan Opportunities Fund Page 131
Pan European Dividend Income Fund Page 137
Pan European Equity Fund Page 143
US Growth Fund Page 151
Specialist Funds
Asia-Pacifi c Property Equities Fund Page 156
Biotechnology Fund Page 162
China Fund Page 171
Global Equity Income Fund Page 174
Global Multi-Asset Fund Page 181
Global Natural Resources Fund Page 188
Global Property Equities Fund Page 193
Global Sustainable Equity Fund Page 201
Global Technology Fund Page 210
Japanese Smaller Companies Fund Page 217
Pan European Alpha Fund Page 224
Pan European Property Equities Fund Page 233
Pan European Smaller Companies Fund Page 239
Notes to the Financial Statements Page 247
Audit report Page 287
Appendix - Additional information
Securities fi nancing transactions Page 291
Risk policies Page 304
Remuneration policy Page 306
General Information Page 317
Contents
2
Chairman:
Les Aitkenhead*
Independent Director
Directors:
Jeremy Vickerstaff
General Manager and Conducting Offi cer,
Henderson Management S.A.
2 Rue de Bitbourg
L-1273 Luxembourg
Grand Duchy of Luxembourg
Jean-Claude Wolter
Independent Director and
Honorary Lawyer,
11B Boulevard Joseph II
L-1840 Luxembourg
Grand Duchy of Luxembourg
Joanna Dentskevich*
Independent Director
Steven de Vries
Head of Global Financial Institutions
Janus Henderson Investors B.V.
Roemer Visscherstraat 43-45
Amsterdam 1054 EW
The Netherlands
James Bowers
Global Product Strategy & Development
Henderson Global Investors Limited
201 Bishopsgate
London EC2M 3AE
United Kingdom
Kevin Adams*
Independent Director
The Company:
Janus Henderson Horizon Fund
2 Rue de Bitbourg
L-1273 Luxembourg
Grand Duchy of Luxembourg
Management Company:
Henderson Management S.A.
2 Rue de Bitbourg
L-1273 Luxembourg
Grand Duchy of Luxembourg
Investment Manager:
Henderson Global Investors Limited
201 Bishopsgate
London EC2M 3AE
United Kingdom
Sub-Investment Managers:
Geneva Capital Management LLC
100 E Wisconsin Ave Ste 2550,
Milwaukee, WI 53202,
United States of America
Janus Capital Management LLC
151 Detroit Street
Denver, Colorado 80206
United States of America
Janus Henderson Investors (Australia)
Institutional Funds Management Limited
Level 47, Gateway
1 Macquarie Place
Sydney NSW 2000
Australia
Janus Henderson Investors (Japan) Limited
Marunouchi Kitaguchi Building 27F
6-5, Marunouchi 1-chome
Tokyo 100-0005
Japan
Janus Henderson Investors (Singapore)
Limited
138 Market Street
#34-03 CapitaGreen
Singapore
048946
Domicile Agent:
Henderson Management S.A.
2 Rue de Bitbourg
L-1273 Luxembourg
Grand Duchy of Luxembourg
Principal Distributors:
Henderson Management S.A.
2 Rue de Bitbourg
L-1273 Luxembourg
Grand Duchy of Luxembourg
Henderson Global Investors Limited
201 Bishopsgate
London EC2M 3AE
Unit Kingdom
Registered Offi ce:
2 Rue de Bitbourg
L-1273 Luxembourg
Grand Duchy of Luxembourg
Administrator:
BNP Paribas Securities Services
Luxembourg Branch
60, Avenue John F. Kennedy
L-1855 Luxembourg
Grand Duchy of Luxembourg
Registrar and Transfer Agent:
RBC Investor Services Bank S.A.
14, Porte de France
L-4360 Esch-sur-Alzette
Grand Duchy of Luxembourg
Company Secretary:
Henderson Management S.A.
2 Rue de Bitbourg
L-1273 Luxembourg
Grand Duchy of Luxembourg
Depositary:
BNP Paribas Securities Services
Luxembourg Branch
60, Avenue John F. Kennedy
L-1855 Luxembourg
Grand Duchy of Luxembourg
Auditor:
PricewaterhouseCoopers, Société
coopérative
2, rue Gerhard Mercator
B.P. 1443
L-1014 Luxembourg
Grand Duchy of Luxembourg
Hong Kong Representative:
RBC Investor Services Trust Hong Kong
Limited
42/F One Taikoo Place
Taikoo Place
979 King‘s Road
Quarry Bay
Hong Kong
Denmark Representative:
Nordea Bank, Danmark A/S
Strandgade 3, Christiansbro
Postboks 850
DK-0900 Copenhagen C
Denmark
Malta Representative:
Jesmond Mizzi Financial Advisors
67, Level 3
South Street
Valletta
Malta
Management and Administration
* c/o registered offi ce.
3
Management and Administration (continued)
Spain Representative:
Allfunds Bank S.A.
Estafeta,
6 Complejo Plaza de la Fuente,
La Moraleja,
Alcobendas
28109 Madrid
Spain
Switzerland Representative:
BNP Paribas Securities Services,
Paris,
succursale de Zurich
Selnaustrasse 16,
8002 Zürich,
Switzerland
Legal Advisers to the Company:
In Luxembourg
Linklaters LLP
35 Avenue John F. Kennedy
PO Box 1107
L-1011 Luxembourg
Grand Duchy of Luxembourg
In England
Eversheds LLP
One Wood Street
London EC2V 7WS
United Kingdom
4
Directors’ Report
Introduction
Janus Henderson Horizon Fund (the Company) is an open ended investment company organised as a société anonyme under the laws
of the Grand Duchy of Luxembourg and qualifi es as a société d‘investissment a capital variable (SICAV). The Company was incorporated
in Luxembourg on 30 May 1985 pursuant to the Luxembourg laws of 10 August 1915 on commercial companies (as amended) and is
qualifi ed as an undertaking for collective investment in transferable securities (UCITS) under Part 1 of the Luxembourg law of
17 December 2010 relating to undertakings for collective investment, as amended (the ‘law’).
The Company is structured as an umbrella company which has the ability to issue various classes of share. Each fund within the umbrella is
treated as an independent entity, with its own portfolio of investments, objective and investment policy.
Shareholders of each fund are entitled only to the wealth and yield of the fund to which they have subscribed. Each fund bears the
appropriate amount of liabilities attributable to it and the commitments entered into in the name of one fund covered solely by the assets of
that fund. The Company will not be liable as a whole to third parties. Separate accounts and records are maintained for each fund.
Financial Statements
The Board of Directors of the Company (the ‘Board’) presents its report and the audited annual fi nancial statements for the year ended 30 June 2019.
A copy of the latest annual and interim reports may be obtained upon request from either the offi ces of the companies registered as
Distributors or from the Registered Offi ce of the Company and at www.janushenderson.com.
The Net Assets at 30 June 2019 amounted to USD 11.69 billion.
At the year end, the Company consisted of 27 active funds.
Fund Changes
• Details of share class launches, closures and share class name changes can be found on pages 252 and 253.
• Janus Henderson Horizon Fund Core Credit Fund closed on 11 July 2018.
• Janus Henderson Horizon Fund Biotechnology Fund launched on 10 December 2018.
• Janus Henderson Horizon Fund Global Corporate Bond Fund closed on 28 February 2019.
• Janus Henderson Horizon Fund Global Sustainable Equity Fund launched on 29 May 2019.
• Eff ective 3 September 2018, Janus Henderson Horizon Asian Dividend Income Fund performance benchmark changed to MSCI AC
Asia Pacifi c Ex Japan High Dividend Yield Index.
• Eff ective 3 September 2018, Janus Henderson Horizon China Fund investment objective and policy changed.
• Eff ective 3 September 2018, the appointment of Henderson Global Investors (North America) as Sub-Investment Manager for the
Janus Henderson Horizon Global Property Equities Fund was terminated.
• Eff ective 3 September 2018, Henderson Global Investors (Singapore) Limited changed its name to Janus Henderson Investors
(Singapore) Limited.
The Directors may from time to time close or merge funds as well as add further funds with diff erent investment objectives, subject to the
approval of the Commission de Surveillance du Secteur Financier (CSSF). Notifi cations will be provided to shareholders on closure and
merger of funds, which are also subject to review by the CSSF.
Brexit update
Janus Henderson Investors has a well-established project underway looking at all possible Brexit impacts including distribution, regulatory
permissions and licences, Human Resources, Information Technology and operations. Janus Henderson Investors is seeking to minimise
the potential impact on investors, and like all fi rms, is operating in an environment that is uncertain and subject to change. Janus Henderson
Investors are proud of our long history in both the UK and continental Europe, and are in a strong position to continue to serve our investors
after the UK leaves the European Union.
Corporate Governance Statement
The Board adheres to the Association of the Luxembourg Fund Industry (ALFI) code of conduct for Luxembourg investment funds.
The code of conduct sets a framework of high-level principles and best practice recommendations for the governance of Luxembourg
investment funds.
On behalf of the Janus Henderson Horizon Fund Board, I would like to thank you for your continued support.
Les Aitkenhead
Chairman
26 September 2019
The information stated in the report is historical and is not representative of future results.
5
Overview
Global equity markets rose over the year to 30 June 2019 (MSCI World Index +6.3% in US Dollar Terms and 9.6% in Euro terms).
Geopolitics, volatile stock markets and trade tensions drove headlines and infl uenced investor sentiment.
Europe
European equities were up (FTSE World Europe ex UK Index +6.0% in Euro terms) despite myriad complications: global trade tensions,
slowing economic growth, a fracas over Italian budget plans and Brexit. The German economy, the largest in Europe, experienced negative
quarterly growth in the third quarter of 2018, and Italy suff ered a short-lived recession. There were fi reworks between the EU and the Italian
government over the latter’s budget, though the situation was defused when Italy proposed reduced spending plans. Markets plummeted
along with most of their global peers in December but were brought higher by the end of the review year. Eurozone GDP improved in the
fi rst half, increasing to 0.4% in the fi rst quarter of 2019 from 0.2% in the preceding three months. European elections yielded a largely
market-friendly result, with populist parties garnering less support than had been feared. In June, the European Central Bank edged its
forecasts for European infl ation and growth higher, though it reminded the public that risks from Brexit uncertainty and potential trade wars
were still at play.
UK
In the UK, the FTSE All-Share Index rose (+0.6% in Sterling terms). The UK’s exit from the EU dominated headlines: the original 29 March
deadline was delayed not once but twice, with an eventual 31 October exit date settled upon. UK Prime Minister Theresa May repeatedly
failed to glean parliamentary support for her withdrawal proposals, and on 7 June, she formally resigned her post. This served to introduce
a new breed of uncertainty, this time regarding who will lead the Conservative Party, and by extension, the country. But accommodative
monetary policy and encouraging economic data helped to keep domestic markets above water: the Bank of England raised rates to 0.75%
in August but grew more dovish as the year wore on, and GDP expansion in the fi rst quarter of 2019 beat consensus estimates at 1.8%
(year on year).
US
US equities advanced (S&P 500 Index +10.4% in US Dollar terms). Equities experienced dramatic highs and lows during the year
under review. In August, the S&P 500 broke the record for its longest-ever bull market run. However, October saw US equities dive and
December witnessed the weakest returns for that month since 1931. By the end of the year, however, equities had regained the levels
recorded in the summer. Trade relations with China were vitriolic. In February, President Trump announced the postponement of additional
tariff s due to be enacted in early March, only to make a complete turnaround and increase tariff s on $200 billion worth of Chinese imports
(from 10% to 25%) in May. The US Federal Reserve raised interest rates twice during the year to fi nish the year at a target range of
2.25–2.50%. The central bank kept rates steady throughout the fi rst half of 2019 and in June changed the phrasing of its offi cial statement
to exclude the word ‘patient’; this led to growing speculation that rates could be lowered later in the year.
Japan
Japanese equities fell (Topix Index -8.2% in Yen terms). Fears about softening domestic data and trade worries stemming from China meant
that returns lagged behind those of other developed markets. In early October, the Nikkei index hit its highest level in 27 years, but Japanese
equities plummeted with their peers in December; global trade tensions and a strengthening Yen dragged markets down. 2019 brought
disappointing economic data: exports declined for six months straight, and June marked the fourth month since the year began in which
the Nikkei Japan manufacturing purchasing managers’ index gave a reading below 50 (anything below 50 signals a contraction). At its June
meeting, the Bank of Japan kept rates unchanged at 0.1% but warned both business owners and householders that risks from overseas
economies should not be disregarded. More positively, GDP growth in the fi rst quarter was decidedly stronger at 2.2% (annualised).
Asia
Asian equities were up in the year (MSCI AC Asia Pacifi c ex Japan Index +1.1% in US Dollar terms and 3.6% in Euro terms). The trade
dispute between China and the US was foremost in investors’ minds, given that many countries in the region are heavily dependent on US
and Chinese trade. Like most of their global peers, Asian indices fell sharply in May, when the US increased the size and scope of its tariff s
on Chinese goods. But optimism returned in June ahead of the G20 summit in Osaka, allowing markets to resume their upward course, and
many nations ended the review year in the green. An exception was South Korea, which saw stocks plummet in the second quarter due
to trade war concerns (South Korea has high exposure to global trade) and the lowest quarterly GDP growth rate since the fi nal quarter
of 2008. Similarly, growth in China continued to decelerate, but sentiment was lifted in April when policymakers announced new stimulus
measures to help boost the incomes of small business owners, including farmers.
Market review
For the year 1 July 2018 to 30 June 2019
6
Market review (continued)
Emerging markets
Emerging markets were also up (MSCI Emerging Markets Index +1.6% in US Dollars terms and 4.2% in Euro terms). Trade friction between
the US and China was a major infl uence on emerging markets, as was the relative strength of the US Dollar. Central banks were active in
the year: Chinese policymakers introduced stimulus measures and the Reserve Bank of India raised interest rates to 6.5% in August 2018
only to lower them three times in the fi rst half of 2019 in an eff ort to combat fl ailing infl ation. Russia also increased then decreased its base
rate in the year. The country boasted one of the strongest markets in the region during the year under review (MSCI Russia +33.2% in
Sterling terms). A strong oil price helped the Russian index to hit successive all-time highs in the second quarter of 2019. Elsewhere, Latin
American markets performed well in aggregate, although this was largely due to the strength of the Brazilian index, which was boosted by
optimism about pension reforms. Returns from Mexico were constrained by the unexpected threat of US tariff s, although this dissipated in
June when the two countries reached a deal to stem illegal migration into the US.
Fixed income
Within fi xed income, core government bond markets were up. Yields fell (and so prices rose) in the US, UK and Germany amid a lack of
clarity on Brexit proceedings, sell off s in global equity markets and trade war worries (JP Morgan Global Government Bond Index +5.7% in
US Dollar terms). Germany and the UK saw yields decline from October as investors began buying government bonds as an antidote to
plummeting global equities. Investors in US Treasuries followed suit in November. May and June saw another marked fall that coincided with
the US imposing steeper tariff s on China and the resignation of the UK’s prime minister. Despite pronounced outfl ows towards the end of
the year, corporate bonds performed well (Bloomberg Barclays Global Aggregate Corporate Bond Index +7.8% in US Dollar terms).
Commodities
The price of West Texas Intermediate fell over the year, swinging from highs of near US$76 per barrel in the autumn to lows near US$44
per barrel at the end of 2018. Prices began to climb in 2019 before falling again on global fears (such as worries regarding US relations
with China, as the two are the world’s top consumers of energy). But oil spiked in June as rumours of a US confl ict with Iran, which could
curtail Middle Eastern production, hit headlines. Gold, on the other hand, boomed. Dovish central banks and aggressive trade rhetoric from
the Trump administration pushed the precious metal particularly high from May. Copper was notably volatile, and fell dramatically from April
on concerns that continuing trade tensions would have adverse eff ects on already sluggish global manufacturing data.
Ten Year Highest and Lowest Net Asset Value Per Share (unaudited) (continued)
As at 30 June 2019
28
Combined Statement of Net Assets
As at 30 June 2019Notes USD
Assets
Investment in securities at market value 3 11,256,877,403Cash at bank 12 502,509,745Interest and dividends receivable 3 46,595,496Subscriptions receivable 59,186,300Receivable for investments sold 47,980,936Unrealised gain on contracts for diff erence 3 6,913,771Unrealised gain on futures contracts 3 4,050,782Unrealised gain on forward foreign exchange contracts 3 14,042,005Purchased option contracts at market value 3 3,629,522Swap contracts at market value 3 20,769,777Other assets 8,780,505Management fee rebate 141,120Total assets 11,971,477,362
Liabilities
Bank overdraft 12 17,889,390Payable for investments purchased 117,430,815Taxes and expenses payable 32,948,379Redemptions payable 47,544,313Unrealised loss on contracts for diff erence 3 2,221,452Unrealised loss on futures contracts 3 3,883,146Unrealised loss on forward foreign exchange contracts 3 11,787,010Sold option contracts at market value 3 4,043,575Swap contracts at market value 3 25,455,789Dividends payable to shareholders 18,200,172Interest and dividends payable on CFD 731,290Other liabilities 183,093Total liabilities 282,318,424 Net assets at the end of the year 11,689,158,938
Combined Statement of Net Assets
As at 30 June 2018Notes USD
Assets
Investment in securities at market value 3 15,195,021,499Cash at bank 12 743,573,531Interest and dividends receivable 3 50,561,984Subscriptions receivable 73,173,379Receivable for investments sold 51,231,841Unrealised gain on contracts for diff erence 3 13,660,559Unrealised gain on futures contracts 3 5,813,387Unrealised gain on forward foreign exchange contracts 3 19,284,870Purchased option contracts at market value 3 2,381,992Swap contracts at market value 3 6,371,713Other assets 11,158,441Management fee rebate 156,433Total assets 16,172,389,629
Liabilities
Bank overdraft 12 15,128,274Payable for investments purchased 57,617,328Taxes and expenses payable 59,397,033Redemptions payable 73,854,424Unrealised loss on contracts for diff erence 3 10,071,255Unrealised loss on futures contracts 3 1,840,325Unrealised loss on forward foreign exchange contracts 3 28,679,745Sold option contracts at market value 3 1,655,885Swap contracts at market value 3 11,145,504Dividends payable to shareholders 20,675,992Interest and dividends payable on CFD 1,453,420Other liabilities 45 Total liabilities 281,519,230 Net assets at the end of the year 15,890,870,399
Janus Henderson Horizon Fund – Combined Statements
The accompanying notes form an integral part of these fi nancial statements.
29
Combined Statement of Operations
For the year from 1 July 2018 to 30 June 2019Notes USD
Income
Dividend income (net of withholding tax) 3 173,960,951Bond interest income 3 93,076,152Income from collective investment schemes 3 1,975,407Derivative income 3 9,740,174Interest received on contracts for diff erence 3 1,776,199Other income 3, 13 4,499,837Total income 285,028,720
Expenses
Management fees 6, 14 113,195,292Administration, registrar and transfer agent fees 6 7,104,626Custodian fees 6 1,617,582Shareholder servicing fees and distribution fees 6, 14 33,538,250Depositary fees 6 880,084Other expenses 6 8,371,003Derivative expenses 3 11,969,288Interest paid on contracts for diff erence 3 4,362,673Performance fees 6 1,440,073Taxation (‘taxe d'abonnement’) 7 4,101,719Total expenses 186,580,590
Net income from investments 98,448,130
Net realised gains/(loss)
Net realised gain on investment securities 3 246,518,522Net realised loss on contracts for diff erence 3 (5,327,999)Net realised gain on futures contracts 3 278,096Net realised loss on swap contracts 3 (301,339)Net realised loss on options contracts 3 (2,998,810)Net realised loss on forward foreign exchange contracts 3 (33,499,722)Net realised loss on currency exchange (3,700,207)
Net realised gain on investments and derivatives 200,968,541
Change in net unrealised appreciation/depreciation on investments
3 (233,447,331)
Change in net unrealised appreciation/depreciation on contracts for diff erence
3 1,225,752
Change in net unrealised appreciation/depreciation on futures contracts
3 (3,724,252)
Change in net unrealised appreciation/depreciation on swap contracts
3 8,252,848
Change in net unrealised appreciation/depreciation on options contracts
3 397,554
Change in net unrealised appreciation/depreciation on forward foreign exchange contracts
3 11,461,531
Change in net unrealised appreciation/depreciation on currency exchange
39,644
Change in unrealised appreciation/depreciation on investments and derivatives
(215,794,254)
Net increase in assets as a result of operations 83,622,417
Combined Statement of Operations
For the year from 1 July 2017 to 30 June 2018Notes USD
Income
Dividend income (net of withholding tax) 3 261,195,011Bond interest income 3 112,194,520Income from collective investment schemes 3 1,476,285Derivative income 3 16,230,725Interest received on contracts for diff erence 3 2,071,229Other income 3, 13 3,128,671Total income 396,296,441
Expenses
Management fees 6, 14 154,371,458Administration, registrar and transfer agent fees 6 8,608,375Custodian fees 6 2,428,096Shareholder servicing fees and distribution fees 6, 14 41,991,467Depositary fees 6 1,020,728Other expenses 6 5,754,917Derivative expenses 3 8,335,450Interest paid on contracts for diff erence 3 4,893,753Performance fees 6 1,374,507Taxation (‘taxe d'abonnement’) 7 5,201,024Total expenses 233,979,775
Net income from investments 162,316,666
Net realised gains/(loss)
Net realised gain on investment securities 3 1,113,195,035Net realised gain on contracts for diff erence 3 33,074,760Net realised loss on futures contracts 3 (24,131,546)Net realised loss on swap contracts 3 (8,348,945)Net realised loss on options contracts 3 (2,364,715)Net realised gain on forward foreign exchange contracts 3 26,899,907Net realised loss on currency exchange (8,545,102)
Net realised gain on investments and derivatives 1,129,779,394
Change in net unrealised appreciation/depreciation on investments
3 (424,311,979)
Change in net unrealised appreciation/depreciation on contracts for diff erence
3 4,259,321
Change in net unrealised appreciation/depreciation on futures contracts
3 884,622
Change in net unrealised appreciation/depreciation on swap contracts
3 2,729,153
Change in net unrealised appreciation/depreciation on options contracts
3 (895,439)
Change in net unrealised appreciation/depreciation on forward foreign exchange contracts
3 (17,568,138)
Change in net unrealised appreciation/depreciation on currency exchange
311,626
Change in unrealised appreciation/depreciation on investments and derivatives
(434,590,834)
Net increase in assets as a result of operations 857,505,226
Janus Henderson Horizon Fund – Combined Statements
The accompanying notes form an integral part of these fi nancial statements.
30
Combined Statement of Changes in Net Assets
For the year from 1 July 2018 to 30 June 2019Notes USD
Net assets at the beginning of the year 15,890,870,399Exchange rate eff ect on opening net assets 2 (215,762,888)Net income from investments 98,448,130Net realised gain on investments and derivatives 200,968,541Change in unrealised appreciation/depreciation on investments and derivatives
(215,794,254)
Proceeds from shares issued 5,125,209,834Payments for shares redeemed (9,167,384,106)Net equalisation (paid)/received 10 2,036,719Dividend distributions 11 (29,433,437)
Net assets at the end of the year 11,689,158,938
Combined Statement of Changes in Net Assets
For the year from 1 July 2017 to 30 June 2018Notes USD
Net assets at the beginning of the year 17,081,206,312Exchange rate eff ect on opening net assets 2 261,507,600Net income from investments 162,316,666Net realised gain on investments and derivatives 1,129,779,394Change in unrealised appreciation/depreciation on investments and derivatives
(434,590,834)
Proceeds from shares issued 8,027,137,426Payments for shares redeemed (10,285,842,225)Net equalisation (paid)/received 10 (14,014,241)Dividend distributions 11 (36,629,699)
Net assets at the end of the year 15,890,870,399
Janus Henderson Horizon Fund – Combined Statements
The accompanying notes form an integral part of these fi nancial statements.
31
Investment Fund Manager
James Briggs
Janus Henderson Horizon Fund Core Credit Fund closed on 11 July 2018.
Core Credit Fund
Investment report for the period from 1 July 2018 to 11 July 2018
32
Core Credit Fund
The accompanying notes form an integral part of these fi nancial statements.
Statement of Net Assets
As at 11 July 2018Notes USD
Assets
Investment in securities at market value 3 -Cash at bank 12 102,013 Interest and dividends receivable 3 -Subscriptions receivable -Receivable for investments sold -Unrealised gain on contracts for diff erence 3 -Unrealised gain on futures contracts 3 -Unrealised gain on forward foreign exchange contracts 3 -Purchased option contracts at market value 3 -Swap contracts at market value 3 -Other assets -Management fee rebate -Total assets 102,013
Liabilities
Bank overdraft 12 4 Payable for investments purchased -Taxes and expenses payable 43,322Redemptions payable -Unrealised loss on contracts for diff erence 3 -Unrealised loss on futures contracts 3 -Unrealised loss on forward foreign exchange contracts 3 -Sold option contracts at market value 3 -Swap contracts at market value 3 -Dividends payable to shareholders -Interest and dividends payable on CFD -Other liabilities 58,687Total liabilities 102,013
Net assets at the end of the period -
Statement of Operations
For the period from 1 July 2018 to 11 July 2018Notes USD
Income
Dividend income (net of withholding tax) 3 -Bond interest income 3 302,332 Income from collective investment schemes 3 -Derivative income 3 -Interest received on contracts for diff erence 3 -Other income 3, 13 31,978 Total income 334,310
Expenses
Management fees 6, 14 18,802 Administration, registrar and transfer agent fees 6 3,760 Custodian fees 6 782 Shareholder servicing fees and distribution fees 6, 14 -Depositary fees 6 752 Other expenses 6 5,018 Derivative expenses 3 -Interest paid on contracts for diff erence 3 -Performance fees 6 -Taxation ("taxe d'abonnement") 7 100 Total expenses 29,214
Net income from investments 305,096
Net realised gain/(loss)
Net realised loss on investment securities 3 (6,497,760) Net realised gain/loss on contracts for diff erence 3 -Net realised gain/loss on futures contracts 3 -Net realised gain/loss on swap contracts 3 -Net realised gain/loss on options contracts 3 -Net realised loss on forward foreign exchange contracts 3 (43,196) Net realised loss on currency exchange (175,932)
Net realised loss on investments and derivatives (6,716,888)
Net change in unrealised appreciation/
depreciation
Change in net unrealised appreciation/depreciation on investments
3 7,432,598
Change in net unrealised appreciation/depreciation on contracts for diff erence
3 -
Change in net unrealised appreciation/depreciation on futures contracts
3 -
Change in net unrealised appreciation/depreciation on swap contracts
3 -
Change in net unrealised appreciation/depreciation on options contracts
3 -
Change in net unrealised appreciation/depreciation on forward foreign exchange contracts
3 (498,221)
Change in net unrealised appreciation/depreciation on currency exchange
-
Change in unrealised appreciation/depreciation on investments and derivatives
6,934,377
Net increase in assets as a result of operations 522,585
33
Core Credit Fund
Statement of Changes in Net Assets
For the period from 1 July 2018 to 11 July 2018Notes USD Notes USD
Net assets at the beginning of the period 380,459,784 Proceeds from shares issued -Net income from investments 305,096 Payments for shares redeemed (380,677,760) Net realised loss on investments and derivatives (6,716,888) Net equalisation (paid)/received 10 (304,609) Change in unrealised appreciation/depreciation on investments and derivatives
6,934,377 Dividend distributions 11 -
Net assets at the end of the period -
Share Transactions
For the period from 1 July 2018 to 11 July 2018Y1
(USD)
Shares outstanding at the beginning of the period 3,985,931.68Shares issued during the period -Shares redeemed during the period (3,985,931.68)Shares outstanding at the end of the period -
Equivalent to a net asset value per share of: 95.58*
* Class closed on 11 July 2018 and this is the fi nal price.
Past performance is not a guide to future performance.
Core Credit Fund
35
Top ten changes in the securities portfolio for the
period from 1 July 2018 to 11 July 2018
Description of Securities Purchases Sales
USD USD
Germany
Henkel KGaA 1.50% 13/09/2019 - 12,996,169
Siemens 2.20% 16/03/2020 - 9,858,610
United Kingdom
AstraZeneca 1.75% 16/11/2018 - 9,637,960
Diageo Capital 3.00% 18/05/2020 - 11,363,249
GlaxoSmithKline Capital 2.85% 08/05/2022 - 12,030,060
UK Treasury 1.25% 22/07/2018 - 17,255,525
Unilever 1.125% 03/02/2022 - 9,876,159
United States
AT&T 5.80% 15/02/2019 - 10,171,525
Merck 2.35% 10/02/2022 - 9,540,178
Toyota Motor Credit 1.55% 13/07/2018 - 10,175,000
Core Credit Fund
36
Investment Fund Managers
Andrew Mulliner and Jennifer James
The fund returned 8.0% based on Class A2 US Dollar terms over the year under review, compared to the benchmark JP Morgan Corporate
Emerging Market Bond Index (CEMBI) Broad Diversifi ed return of 10.2%.
The fi rst half of the year saw emerging market spreads widen, mostly after a rise in US Treasury yields. However, underlying trends at the
country level were mixed due to idiosyncratic risks. Overall, low default rates were at cycle lows, which helped keep demand for emerging
market risk healthy.
Total returns in the second half of the year were much more robust. The fi rst quarter of 2019 was one of the strongest starts of the year for
the CEMBI; some of its favourable performance was due to the duration rally but also to spreads compressing. Although global sentiment
weakened as several disconcerting geopolitical events hit headlines, expectations of support from central banks caused the market to rally.
These events included US/China negotiations over a trade deal that has been repeatedly delayed, adding turmoil to the fragile situation. In
Central & Eastern Europe, the Middle East and Africa, the situation between the US and Iran escalated – a solution is yet to be found.
In Latin America, the three major economies struggled. Argentina has been the main concern due to infl ation, its central bank rate reaching
the highest levels in the world, the economy falling into recession and uncertainty around October’s presidential elections. In Mexico,
consensus is that the new administration is failing to provide the right measures for the economy. Petroleos Mexicanos, a state-owned oil
company, has ballooning debt and structural disadvantages; this has led to a downgrade at the sovereign level, with expectations for further
downgrades until these issues are addressed.
Positive performance came from positioning in high beta sovereign bonds, especially in Africa. These included Kenya, Nigeria and Pakistan.
Further positive performance came from positioning in short term Hong Kong and Chinese papers that contributed to outperformance in
China.
Over the reporting period, the fund’s underperformance against the index was almost entirely witnessed in the fi rst half 2019 due to being
underweight beta. The fund missed some broad-based rallies across the board, including in Indonesia, India and Russia, where the fund
had no exposure. It also underperformed in Turkey due to credit selection.
Overall, the hard currency space was supported by duration, especially in the second part of the year.
The outlook for global growth has been worsening, and investors looking for yield are continuing to fl ock to emerging markets. This has
been evidenced by strong infl ows thus far in 2019, with more room to go. Overall, the deteriorating macroeconomic environment is being
off set by dovish central banks, stable fundamentals and positive technicals. The outlook for credit would be more positive if bonds didn’t
look already rich. As such, there could be a modest widening in spreads for the remainder of the year, and some relative value opportunities
might arise. In general, weaker growth and a steeper US Treasury curve tend to be challenging for emerging market assets.
Please note with eff ect from 28 June 2019 Steve Drew no longer manages this fund. Jennifer James and Andrew Mulliner are now
co-managers.
Emerging Market Corporate Bond Fund
Investment report for the year from 1 July 2018 to 30 June 2019
37
Emerging Market Corporate Bond Fund
The accompanying notes form an integral part of these fi nancial statements.
Statement of Net Assets
As at 30 June 2019 Notes USD
Assets
Investment in securities at market value 3 76,796,289 Cash at bank 12 2,557,601 Interest and dividends receivable 3 864,976 Subscriptions receivable 190,000 Receivable for investments sold 827,096 Unrealised gain on contracts for diff erence 3 -Unrealised gain on futures contracts 3 143,211 Unrealised gain on forward foreign exchange contracts 3 332,067 Purchased option contracts at market value 3 -Swap contracts at market value 3 -Other assets -Management fee rebate -Total assets 81,711,240
Liabilities
Bank overdraft 12 7,962 Payable for investments purchased 1,941,752 Taxes and expenses payable 157,694 Redemptions payable 53,420 Unrealised loss on contracts for diff erence 3 -Unrealised loss on futures contracts 3 -Unrealised loss on forward foreign exchange contracts 3 6,860 Sold option contracts at market value 3 -Swap contracts at market value 3 -Dividends payable to shareholders 52,181 Interest and dividends payable on CFD -Other liabilities -Total liabilities 2,219,869
Net assets at the end of the year 79,491,371
Statement of Operations
For the year from 1 July 2018 to 30 June 2019Notes USD
Income
Dividend income (net of withholding tax) 3 -Bond interest income 3 4,515,917 Income from collective investment schemes 3 -Derivative income 3 2,668 Interest received on contracts for diff erence 3 -Other income 3, 13 52,849 Total income 4,571,434
Expenses
Management fees 6, 14 453,727 Administration, registrar and transfer agent fees 6 35,546 Custodian fees 6 17,164 Shareholder servicing fees and distribution fees 6, 14 105,493 Depositary fees 6 5,287 Other expenses 6 39,483 Derivative expenses 3 43,092 Interest paid on contracts for diff erence 3 -Performance fees 6 -Taxation ("taxe d'abonnement") 7 19,667 Total expenses 719,459
Net income from investments 3,851,975
Net realised gain/(loss)
Net realised loss on investment securities 3 (5,296,811) Net realised gain/loss on contracts for diff erence 3 -Net realised gain on futures contracts 3 713,590 Net realised gain/loss on swap contracts 3 -Net realised gain/loss on options contracts 3 -Net realised loss on forward foreign exchange contracts 3 (1,900,060) Net realised loss on currency exchange (8,204)
Net realised loss on investments and derivatives (6,491,485)
Net change in unrealised appreciation/
depreciation
Change in net unrealised appreciation/depreciation on investments
3 6,882,989
Change in net unrealised appreciation/depreciation on contracts for diff erence
3 -
Change in net unrealised appreciation/depreciation on futures contracts
3 143,211
Change in net unrealised appreciation/depreciation on swap contracts
3 -
Change in net unrealised appreciation/depreciation on options contracts
3 -
Change in net unrealised appreciation/depreciation on forward foreign exchange contracts
3 775,337
Change in net unrealised appreciation/depreciation on currency exchange
(213)
Change in unrealised appreciation/depreciation on investments and derivatives
7,801,324
Net increase in assets as a result of operations 5,161,814
38
Emerging Market Corporate Bond Fund
Statement of Changes in Net Assets
For the year from 1 July 2018 to 30 June 2019Notes USD Notes USD
Net assets at the beginning of the year 114,597,221 Proceeds from shares issued 8,713,477 Net income from investments 3,851,975 Payments for shares redeemed (48,471,518) Net realised loss on investments and derivatives (6,491,485) Net equalisation (paid)/received 10 (100,223) Change in unrealised appreciation/depreciation on investments and derivatives
7,801,324 Dividend distributions 11 (409,400)
Net assets at the end of the year 79,491,371
Share Transactions
For the year from 1 July 2018 to 30 June 2019A2
(USD)
A2 HEUR
(EUR)
A3 HEUR
(EUR)
F2
(USD)
H2
(USD)
H2 HEUR
(EUR)
Shares outstanding at the beginning of the year 146,194.17 36,820.12 - 1,095.15 500.00 22.00Shares issued during the year 25,365.02 7,581.83 41.67 794.42 5,146.00 -Shares redeemed during the year (53,772.09) (6,868.93) - (95.15) - -Shares outstanding at the end of the year 117,787.10 37,533.02 41.67 1,794.42 5,646.00 22.00
Equivalent to a net asset value per share of: 122.37 113.02 121.80 109.62 125.11 113.94
I2
(USD)
I2 HEUR
(EUR)
X2
(USD)
X3
(USD)
Z2 HGBP
(GBP)
Z3 HAUD
(AUD)
Shares outstanding at the beginning of the year 231,160.05 8,696.85 80,676.75 7,911.22 276,857.01 186,758.64Shares issued during the year 1,016.94 21,282.20 9,970.85 455.92 1,891.71 1.54Shares redeemed during the year (200.54) (257.33) (15,566.42) (2,718.94) (192,508.32) (141,337.69)Shares outstanding at the end of the year 231,976.45 29,721.72 75,081.18 5,648.20 86,240.40 45,422.49
Equivalent to a net asset value per share of: 124.86 115.20 120.29 107.38 125.16 97.77
* The share class launched in the year and the rate is annualised.There were no performance fees on the fund as at 30 June 2019.
Performance history (unaudited)
Fund & Benchmark Since launch to 1 year to 1 year to 1 year to 1 year to
30 Jun 15 30 Jun 16 30 Jun 17 30 Jun 18 30 Jun 19
% % % % %
Emerging Market Corporate Bond Fund* A2 (USD) 3.36 5.41 6.58 (2.39) 7.96 JP Morgan Corporate Emerging Market Bond Index (CEMBI) Broad Diversifi ed
1.64 5.30 6.81 (0.14) 10.21
Performance quoted in the investment report relates to Class A2 (USD) shares.* on 5 November 2014, the Emerging Market Corporate Bond Fund was launched.
Past performance is not a guide to future performance.
40
Emerging Market Corporate Bond Fund
Portfolio as at 30 June 2019 (continued)
Number
of Securities
Market
Value
USD
% of
Net
Assets
Transferable securities and money market instruments admitted to an offi cial exchange listing and/or dealt on another regulated market, unless otherwise stated.
Bonds 96.61%
Argentina 2.89%
Fixed Rate Bond 2.89%
USD 560,000 Aguas y Saneamientos Argentinos 6.625% 01/02/2023
420,263 0.53
USD 440,000 Argentina (Republic of) 6.875% 22/04/2021 386,100 0.49
Investment in securities and derivatives 77,264,707 97.20
Other net assets 2,226,664 2.80
Total net assets 79,491,371 100.00
* In the case of derivative instruments, Market Value refers to the net profi t or loss and is used in the calculation of the Fund NAV.
Any diff erences in the percentage of Net Assets fi gures are the result of roundings.
43
Emerging Market Corporate Bond Fund
Top ten changes in the securities portfolio for the year
from 1 July 2018 to 30 June 2019
Description of Securities Purchases Sales
USD USD
Angola
Angola (Republic of) 8.25% 09/05/2028 - 4,387,933
China
Bank of Communications FRN 21/02/2020 3,605,004 3,606,040
Bank of Communications FRN 15/05/2020 3,355,383 3,354,355
Bank of China FRN 14/02/2020 3,005,580 -
Bank of China FRN 11/07/2019 - 3,698,577
Industrial & Commercial Bank of China FRN 12/10/2020 5,985,453 5,985,470
Industrial & Commercial Bank of China FRN 14/12/2020 2,773,885 5,181,841
Inventive Global Investments FRN 19/09/2020 3,865,288 -
Lenovo 4.70% 08/05/2019 - 3,301,758
Jamaica
Digicel 8.25% 30/09/2020 - 3,258,011
Saudi Arabia
Saudi Arabia (Kingdom of) 2.375% 26/10/2021 3,062,400 -
Saudi Arabia (Kingdom of) 5.00% 17/04/2049 - 4,159,437
United States
US Treasury 0.00% 04/06/2019 4,664,507 4,674,663
US Treasury 0.00% 27/06/2019 2,987,676 -
US Treasury 0.00% 11/07/2019 2,385,780 -
44
Euro Corporate Bond Fund
Investment Fund Managers
Tim Winstone and Tom Ross
The fund returned 4.6% based on Class A2 Euro terms, over the year under review, compared to the benchmark iBoxx Euro Corporates
Index return of 4.8%.
Euro investment grade credit delivered a strong positive total return over the year under review. Performance was driven by positive excess
credit returns (versus government bonds) with credit spreads (the extra yield demanded over an equivalent government bond) tightening
over the year. Movements in German government bond markets also added to performance, as yields declined signifi cantly across the
curve, with long dated government bonds ending the fi nancial year with negative yields.
The fi nancial year was one of two halves. The second half of 2018 delivered negative total and excess credit returns, with credit spreads
widening signifi cantly in November and December. Euro investment grade corporate bonds suff ered as volatility increased and global
market sentiment deteriorated on the back of elevated geopolitical and macroeconomic apprehensions. In particular, concerns over Italy,
the US/China trade dispute and Brexit dominated investors’ attention. Euro investment grade outfl ows, alongside heavy net supply, further
contributed to the weak performance.
In contrast, the latter part of the year under review delivered strong positive total and excess credit returns. Despite bouts of market
weakness over the six months, credit spreads compressed on the back of a constructive market tone largely driven by the US Federal
Reserve (Fed) and European Central Bank (ECB) taking on a more dovish tilt and expectations of a trade deal between the US and China.
Despite continued heavy supply, Euro investment grade market dynamics were also supportive to credit spreads, as the asset class saw
strong positive fl ows, buoyed by a search for yield among investors.
Strong relative performance came from security selection, particularly within the BBB and BB rating segments. On a single name basis,
the greatest performance came from the fund’s overweight to Sterling-denominated bonds in Tesco, as credit spreads tightened towards
the end of the year under review on the back of Moody’s upgrading the issuer to Baa3 and some of the company’s bonds subsequently
entering investment grade indices. Positive relative performance also came from the fund’s overweight risk to consumer services and real
estate.
In the last six months of the fi nancial year, the fund’s overall underweight risk stance compared with the index hurt relative performance
given the strength in the Euro investment grade market. On a security selection basis, it was largely our underweight positions that
detracted from the portfolio’s performance, with underweights to Telefonica, Eni and Iberdrola in particular hurting relative performance.
We have become more positive on European investment grade credit overall relative to last month and have increased risk to take the
fund to a small overweight risk position versus the benchmark. Despite the continued weak economic backdrop, we have become more
constructive on the back of dovish rhetoric from the Fed and ECB. We believe the US and European central banks will continue to support
risk assets in the near term and cause European investment grade credit spreads to tighten modestly from here.
We acknowledge that the macroeconomic landscape remains fraught with geopolitical and economic threats. While the US and China
agreed at the G20 summit to restart trade negotiations, confl ict between the two parties remains unresolved, and as such, is likely to
continue to linger in the background. Italian politics, Brexit negotiations, heavy supply, fund outfl ows and government bond yield volatility
also remain key threats to European investment grade stability. Valuations have deteriorated, with credit spreads (versus government)
close to their three-year and fi ve-year average levels (current 108bps; three-year average 110bps; fi ve-year average 110bps). However,
despite less appealing valuations and uncertain economic conditions, we believe dovish support from the US and European central banks,
alongside large volumes of negative-yielding debt, could cause credit spreads to tighten further from here.
Overall, we are positioned slightly long risk versus the index. The fund is composed of an underweight to European investment grade
credit and an overweight to non-core areas of credit (including European high yield) as well as smaller exposures in Sterling and US Dollar
investment grade and high yield credit. Our non-core allocation is a function of high-conviction bottom-up stock selection. Fund activity
from this juncture is likely to evolve with central bank policy; more clarity and confi rmation of renewed stimulus measures will likely see us
increase risk further.
Investment report for the year from 1 July 2018 to 30 June 2019
45
Euro Corporate Bond Fund
The accompanying notes form an integral part of these fi nancial statements.
Statement of Net Assets
As at 30 June 2019Notes EUR
Assets
Investment in securities at market value 3 1,373,556,548 Cash at bank 12 75,179,900 Interest and dividends receivable 3 11,300,817 Subscriptions receivable 7,761,073 Receivable for investments sold 7,737,549 Unrealised gain on contracts for diff erence 3 -Unrealised gain on futures contracts 3 1,336,415 Unrealised gain on forward foreign exchange contracts 3 1,257,599 Purchased option contracts at market value 3 -Swap contracts at market value 3 1,559,825 Other assets -Management fee rebate -Total assets 1,479,689,726
Liabilities
Bank overdraft 12 -Payable for investments purchased 50,180,972 Taxes and expenses payable 3,173,090 Redemptions payable 4,876,853 Unrealised loss on contracts for diff erence 3 -Unrealised loss on futures contracts 3 1,134,860 Unrealised loss on forward foreign exchange contracts 3 215,650 Sold option contracts at market value 3 -Swap contracts at market value 3 5,232,015 Dividends payable to shareholders 6,833,185 Interest and dividends payable on CFD -Other liabilities -Total liabilities 71,646,625
Net assets at the end of the year 1,408,043,101
Statement of Operations
For the year from 1 July 2018 to 30 June 2019Notes EUR
Income
Dividend income (net of withholding tax) 3 -Bond interest income 3 33,513,608 Income from collective investment schemes 3 -Derivative income 3 28,003 Interest received on contracts for diff erence 3 -Other income 3, 13 324,631 Total income 33,866,242
Expenses
Management fees 6, 14 9,930,881 Administration, registrar and transfer agent fees 6 655,753 Custodian fees 6 140,941 Shareholder servicing fees and distribution fees 6, 14 1,302,768 Depositary fees 6 103,906 Other expenses 6 814,104 Derivative expenses 3 2,857,396 Interest paid on contracts for diff erence 3 -Performance fees 6 61,492 Taxation ("taxe d'abonnement") 7 351,045 Total expenses 16,218,286
Net income from investments 17,647,956
Net realised gain/(loss)
Net realised gain on investment securities 3 6,338,331 Net realised gain/loss on contracts for diff erence 3 -Net realised gain on futures contracts 3 7,195,763 Net realised gain on swap contracts 3 1,058,495 Net realised gain/loss on options contracts 3 -Net realised loss on forward foreign exchange contracts 3 (457,040) Net realised loss on currency exchange (380,711)
Net realised gain on investments and derivatives 13,754,838
Net change in unrealised appreciation/
depreciation
Change in net unrealised appreciation/depreciation on investments
3 39,176,861
Change in net unrealised appreciation/depreciation on contracts for diff erence
3 -
Change in net unrealised appreciation/depreciation on futures contracts
3 (250,527)
Change in net unrealised appreciation/depreciation on swap contracts
3 (945,488)
Change in net unrealised appreciation/depreciation on options contracts
3 -
Change in net unrealised appreciation/depreciation on forward foreign exchange contracts
3 643,177
Change in net unrealised appreciation/depreciation on currency exchange
(7,459)
Change in unrealised appreciation/depreciation on investments and derivatives
38,616,564
Net increase in assets as a result of operations 70,019,358
46
Euro Corporate Bond Fund
Statement of Changes in Net Assets
For the year from 1 July 2018 to 30 June 2019Notes EUR Notes EUR
Net assets at the beginning of the year 1,640,048,389 Proceeds from shares issued 843,884,867 Net income from investments 17,647,956 Payments for shares redeemed (1,136,015,462) Net realised gain on investments and derivatives 13,754,838 Net equalisation (paid)/received 10 (3,037,972) Change in unrealised appreciation/depreciation on investments and derivatives
38,616,564 Dividend distributions 11 (6,856,079)
Net assets at the end of the year 1,408,043,101
Share Transactions
For the year from 1 July 2018 to 30 June 2019A2
(EUR)
A2 HCHF
(CHF)
A2 HSEK
(SEK)
A2 HUSD
(USD)
A3
(EUR)
A3 HGBP
(GBP)
Shares outstanding at the beginning of the year 2,754,176.65 73,243.05 21,418.74 87,394.02 293,289.08 41,413.11Shares issued during the year 757,360.50 18,436.42 2,627.10 10,366.70 17,288.79 1,641.24Shares redeemed during the year (1,179,112.43) (15,801.92) (9,231.91) (17,352.25) (62,002.48) (7,474.59)Shares outstanding at the end of the year 2,332,424.72 75,877.55 14,813.93 80,408.47 248,575.39 35,579.76
Equivalent to a net asset value per share of: 162.00 129.41 1,403.63 129.15 132.66 126.83
F2
(USD)
F2 HUSD
(USD)
G2
(EUR)
G2 HCHF
(CHF)
H2
(EUR)
H2 HCHF
(CHF)
Shares outstanding at the beginning of the year 25.00 25.00 60,877.45 25.00 153,073.20 2,989.80Shares issued during the year - - 2,812,154.65 - 202,598.35 1,050.00Shares redeemed during the year - - (1,050,492.79) - (89,793.02) (500.00)Shares outstanding at the end of the year 25.00 25.00 1,822,539.31 25.00 265,878.53 3,539.80
Equivalent to a net asset value per share of: 117.90 113.86 117.38 106.02 122.96 109.88
H2 HSEK
(SEK)
H2 HUSD
(USD)
H3
(EUR)
H3 HGBP
(GBP)
I2
(EUR)
I2 HCHF
(CHF)
Shares outstanding at the beginning of the year 165,660.75 25.00 110,653.78 16,963.18 4,992,708.00 24,026.45Shares issued during the year 17,589.84 - 10,151.00 77.47 1,943,064.01 30,464.18Shares redeemed during the year (176,262.60) - (37,771.12) (4,368.99) (4,525,613.76) (20,191.91)Shares outstanding at the end of the year 6,987.99 25.00 83,033.66 12,671.66 2,410,158.25 34,298.72
Equivalent to a net asset value per share of: 1,114.52 120.10 105.31 108.48 168.43 119.38
I2 HUSD
(USD)
I3
(EUR)
I3
(USD)
X2
(EUR)
X3
(EUR)
Shares outstanding at the beginning of the year 229,389.53 1,964,595.66 1,912.11 58,352.78 14,926.81Shares issued during the year 110,481.43 403,704.80 - 4,033.18 198.27Shares redeemed during the year (303,639.51) (217,188.74) (422.19) (25,006.37) (1,479.68)Shares outstanding at the end of the year 36,231.45 2,151,111.72 1,489.92 37,379.59 13,645.40
Equivalent to a net asset value per share of: 120.59 136.63 92.83 141.86 106.59
TER is calculated in accordance with SFAMA (Swiss Funds and Asset Management Association).The amounts earned in relation to performance fees for the year are shown in note 6 to the fi nancial statements.The TER includes performance fees as at 30 June 2019.
48
Performance history (unaudited)
Fund & Benchmark 1 year to
30 Jun 15
1 year to
30 Jun 16
1 year to
30 Jun 17
1 year to
30 Jun 18
1 year to
30 Jun 19
% % % % %
Euro Corporate Bond Fund A2 (EUR) 0.68 2.91 2.27 0.93 4.61 iBoxx Euro Corporates Index 1.60 5.02 1.21 1.08 4.84
Performance quoted in the investment report relates to Class A2 (EUR) shares.
Past performance is not a guide to future performance.
Euro Corporate Bond Fund
49
Euro Corporate Bond Fund
Portfolio as at 30 June 2019 (continued)
Number
of Securities
Market
Value
EUR
% of
Net
Assets
Transferable securities and money market instruments admitted to an offi cial exchange listing and/or dealt on another regulated market, unless otherwise stated.
+ Related party to the fund.* In the case of derivative instruments, Market Value refers to the net profi t or loss and is used
in the calculation of the Fund NAV.** Applicable for authorised funds per the SFC (Securities and Futures Commission) guidelines.Any diff erences in the percentage of Net Assets fi gures are the result of roundings.
54
Euro Corporate Bond Fund
Top ten changes in the securities portfolio for the year
The fund returned 5.9% based on Class A2 Euro terms over the year under review, compared with the ICE BofA Merrill Lynch European
Currency Non-Financial High Yield Constrained Index which returned 5.1%.
European high yield bonds delivered a positive total return over the year under review. Performance was driven by positive excess credit returns
(versus governments) with credit spreads (versus governments) tightening over the year. Movements in German and UK government bonds
also added to performance, as yields declined signifi cantly across the curve.
The year was one of two halves. The second half of 2018 delivered negative total and excess credit returns (versus governments) with
credit spreads widening signifi cantly in November and December 2018. Euro investment grade bonds suff ered towards the end of 2018
as volatility increased and global market sentiment deteriorated on the back of elevated geopolitical and macroeconomic apprehensions.
In particular, concerns over Italy, the US/China trade dispute, and Brexit dominated investors’ attention, aff ecting sentiment. Idiosyncratic
weakness also adversely impacted the market tone, with numerous European high yield companies seeing sharp price declines on the back
of negative news. European high yield saw signifi cant outfl ows over the year, which further contributed to the weak excess credit returns.
In contrast, the latter part of the year under review delivered strong positive total and excess credit returns. Despite bouts of market
weakness over the six months, credit spreads compressed on the back of a constructive market tone largely driven by the US Federal
Reserve (Fed) and European Central Bank (ECB) taking on a more dovish tilt, and expectations of a trade deal between the US and China.
European high yield market dynamics were also supportive of credit spreads, as supply was extremely light versus historical levels and the
asset class saw strong positive fl ows, buoyed by a search for yield among investors.
Given the pick-up in idiosyncratic weakness in European high yield markets over the year, security selection was a key driver of relative
returns. On a single name basis, the majority of positive relative performance came from issuers in which the fund was underweight, such
as Thomas Cook, Casino and CMC Ravenna. Strong performance also came from a credit default swap short risk position to French
industrial company Novafi ves, which we closed following weak earnings and material spread widening.
During the second half of the year under review, negative performance came from the fund’s underweight risk position versus the index
given the strong rally seen in the market. The fund’s underweight to telecommunications and security selection within the sector (such as
underweights to Wind Tre and Telefonica, and an overweight to Telecom Italia) also detracted from relative performance.
We have become more positive on European high yield credit recently and have subsequently increased risk to take the fund to a small
overweight risk position versus the benchmark. Despite the weak economic backdrop, we have become more constructive on global
high yield markets on the back of dovish rhetoric from the Fed and ECB. Within high yield specifi cally, we are particularly positive about
European high yield. We believe credit spreads may tighten further. Large volumes of negative-yielding European government and corporate
bonds, in addition to the ECB continuing to support markets and potentially restarting asset purchases, may cause demand for European
high yield to remain strong.
We acknowledge that the macroeconomic landscape remains fraught with geopolitical and economic threats. While the US and China
agreed at the G20 summit to restart trade negotiations, confl ict between the two parties remains unresolved, and as such, is likely to
continue to linger in the background. Italian politics, Brexit negotiations and a resurgence of fund outfl ows also remain key threats to
European high yield stability. Valuations have become less attractive, with credit spreads (versus government bond spreads) now closer
to their three-year average levels (current: 388 basis points; three-year average 373bps; fi ve-year average 409bps). However, despite
less appealing valuations and uncertain economic conditions, we believe that in the short term, dovish support from the US and European
central banks, alongside a strong search for yield among investors, could cause credit spreads to tighten further from here.
Given the above, we are currently positioned slightly long risk versus the index. We believe single name dispersion will continue to be a key
theme within European high yield this year, and we will remain focused on using these idiosyncratic opportunities to help drive returns.
Please note that with eff ect from 6 March 2019, Thomas Hanson was replaced as Fund Manager for this fund by Tim Winstone.
Investment report for the year from 1 July 2018 to 30 June 2019
56
Euro High Yield Bond Fund
The accompanying notes form an integral part of these fi nancial statements.
Statement of Net Assets
As at 30 June 2019 Notes EUR
Assets
Investment in securities at market value 3 352,366,542 Cash at bank 12 23,554,707 Interest and dividends receivable 3 4,351,685 Subscriptions receivable 4,435,538 Receivable for investments sold -Unrealised gain on contracts for diff erence 3 -Unrealised gain on futures contracts 3 137,550 Unrealised gain on forward foreign exchange contracts 3 1,012,945 Purchased option contracts at market value 3 -Swap contracts at market value 3 567,632 Other assets -Management fee rebate -Total assets 386,426,599
Liabilities
Bank overdraft 12 429,651 Payable for investments purchased -Taxes and expenses payable 961,554 Redemptions payable 498,170 Unrealised loss on contracts for diff erence 3 -Unrealised loss on futures contracts 3 490,358 Unrealised loss on forward foreign exchange contracts 3 202,703 Sold option contracts at market value 3 -Swap contracts at market value 3 1,052,192 Dividends payable to shareholders 745,210 Interest and dividends payable on CFD -Other liabilities -Total liabilities 4,379,838
Net assets at the end of the year 382,046,761
Statement of Operations
For the year from 1 July 2018 to 30 June 2019Notes EUR
Income
Dividend income (net of withholding tax) 3 -Bond interest income 3 12,061,403 Income from collective investment schemes 3 -Derivative income 3 11,120 Interest received on contracts for diff erence 3 -Other income 3, 13 148,718 Total income 12,221,241
Expenses
Management fees 6, 14 1,854,995 Administration, registrar and transfer agent fees 6 124,075 Custodian fees 6 32,892 Shareholder servicing fees and distribution fees 6, 14 292,981 Depositary fees 6 16,296 Other expenses 6 164,007 Derivative expenses 3 483,652 Interest paid on contracts for diff erence 3 -Performance fees 6 291,783 Taxation ("taxe d'abonnement") 7 76,453 Total expenses 3,337,134
Net income from investments 8,884,107
Net realised gain/(loss)
Net realised gain on investment securities 3 1,195,439Net realised gain/loss on contracts for diff erence 3 -Net realised loss on futures contracts 3 (649,052)Net realised gain on swap contracts 3 586,023 Net realised gain/loss on options contracts 3 -Net realised loss on forward foreign exchange contracts 3 (420,838) Net realised loss on currency exchange (194,450)
Net realised gain on investments and derivatives 517,122
Net change in unrealised appreciation/
depreciation
Change in net unrealised appreciation/depreciation on investments
3 9,914,293
Change in net unrealised appreciation/depreciation on contracts for diff erence
3 -
Change in net unrealised appreciation/depreciation on futures contracts
3 (356,168)
Change in net unrealised appreciation/depreciation on swap contracts
3 (612,029)
Change in net unrealised appreciation/depreciation on options contracts
3 -
Change in net unrealised appreciation/depreciation on forward foreign exchange contracts
3 253,790
Change in net unrealised appreciation/depreciation on currency exchange
(8,930)
Change in unrealised appreciation/depreciation on investments and derivatives
9,190,956
Net increase in assets as a result of operations 18,592,185
57
Euro High Yield Bond Fund
Statement of Changes in Net Assets
For the year from 1 July 2018 to 30 June 2019Notes EUR Notes EUR
Net assets at the beginning of the year 203,239,742 Proceeds from shares issued 301,472,094 Net income from investments 8,884,107 Payments for shares redeemed (142,010,630) Net realised gain on investments and derivatives 517,122 Net equalisation (paid)/received 10 3,572,709 Change in unrealised appreciation/depreciation on investments and derivatives
9,190,956 Dividend distributions 11 (2,819,339)
Net assets at the end of the year 382,046,761
Share Transactions
For the year from 1 July 2018 to 30 June 2019A2
(EUR)
A2 HCHF
(CHF)
A2 HUSD
(USD)
A3
(EUR)
A3 HUSD
(USD)
C2
(EUR)
Shares outstanding at the beginning of the year 167,427.37 1,863.18 44,268.96 511,590.59 25.82 -Shares issued during the year 255,309.72 1,285.00 21,937.44 272,309.90 1.13 25.00Shares redeemed during the year (100,919.96) (371.54) (18,077.61) (126,227.88) - -Shares outstanding at the end of the year 321,817.13 2,776.64 48,128.79 657,672.61 26.95 25.00
Equivalent to a net asset value per share of: 152.05 144.75 162.10 107.57 103.28 100.91
F3 HUSD
(USD)
H2
(EUR)
H2 HUSD
(USD)
H3
(EUR)
I2
(EUR)
I2 HUSD
(USD)
Shares outstanding at the beginning of the year 19.92 271.01 21.00 626.27 736,541.38 12,500.00Shares issued during the year 0.88 64,939.87 - 17,539.94 1,275,312.86 140,834.83Shares redeemed during the year - (15,394.00) - (500.00) (620,341.61) (93,739.31)Shares outstanding at the end of the year 20.80 49,816.88 21.00 17,666.21 1,391,512.63 59,595.52
Equivalent to a net asset value per share of: 134.64 122.72 132.44 119.02 156.07 144.58
I3 HUSD
(USD)
X2
(EUR)
X3
(EUR)
Z2
(EUR)
Z2 HGBP
(GBP)
Shares outstanding at the beginning of the year 5,122.82 13,354.64 11,472.56 5,000.00 32,100.49Shares issued during the year 7,193.13 69,107.84 5,600.01 91,979.02 1,095.57Shares redeemed during the year (1,000.00) (17,221.11) (1,511.69) - (32,100.49)Shares outstanding at the end of the year 11,315.95 65,241.37 15,560.88 96,979.02 1,095.57
Equivalent to a net asset value per share of: 103.87 124.33 102.00 115.92 171.50
TER is calculated in accordance with SFAMA (Swiss Funds and Asset Management Association).* The share class launched in the year and the rate is annualised.The amounts earned in relation to performance fees for the year are shown in note 6 to the fi nancial statements.The TER includes performance fees as at 30 June 2019.
Performance history (unaudited)
Fund & Benchmark 1 year to
30 Jun 15
1 year to
30 Jun 16
1 year to
30 Jun 17
1 year to
30 Jun 18
1 year to
30 Jun 19
% % % % %
Euro High Yield Bond Fund A2 (EUR) 2.49 2.27 10.07 1.28 5.88 ICE BofA Merrill Lynch European Currency Non-Financial High Yield Constrained Index
2.63 2.26 10.24 0.87 5.14
Performance quoted in the investment report relates to Class A2 (EUR) shares.
Past performance is not a guide to future performance.
59
Euro High Yield Bond Fund
Portfolio as at 30 June 2019 (continued)
Number
of Securities
Market
Value
EUR
% of
Net
Assets
Transferable securities and money market instruments admitted to an offi cial exchange listing and/or dealt on another regulated market, unless otherwise stated.
Teva Pharmaceutical Finance II 4.50% 01/03/2025 8,384,038 6,179,675
Italy
Wind Tre 5.00% 20/01/2026 3,978,619 -
Wind Tre 3.125% 20/01/2025 - 3,411,634
Luxembourg
Altice 8.00% 15/05/2027 6,466,563 -
Altice Financing 7.25% 15/05/2022 - 3,287,625
Netherlands
LeasePlan 7.375% Perpetual 4,010,000 -
Spain
Banco De Sabadell 5.375% 12/12/2028 4,651,883 -
Telefónica 5.00% Perpetual 4,158,400 -
United Kingdom
CYBG 4.00% 25/09/2026 - 3,121,715
Fiat Chrysler Automobiles 3.75% 29/03/2024 - 3,596,595
Virgin Media Secured Finance 5.50% 15/01/2025 5,057,691 5,134,132
Vodafone 3.10% 03/01/2079 4,767,114 -
United States
Endo Finance Issuers 6.00% 01/02/2025 - 3,459,526
Jewel UK Bondco 8.50% 15/04/2023 - 3,050,859
64
Global Corporate Bond Fund
Investment Fund Manager
James Briggs
The fund returned 2.6% based on Class A2 US Dollar terms over the period under review, compared with the benchmark Barclays Global
Aggregate Corporate Bond Index return of 3.3%.
Positive performance came from security selection, particularly within the consumer non-cyclical, capital goods and technology sectors.
On a single name basis, overweights to Equinix, Procter & Gamble and Takeda Pharmaceutical added strongly to credit returns.
The fund’s underweight risk position to the index hurt performance, given the strength in the market over the year. Security selection within
the banking sector also detracted from total returns, with fund overweights to CYBG, Bank of America Merrill Lynch and Rabobank hurting
performance the most.
Global corporate bonds produced a positive total return over the fi nancial period. Performance was driven by positive excess credit
returns (versus governments), with credit spreads (the extra yield demanded over an equivalent government bond) in US, European and
Sterling investment grade markets tightening over the year. Movements in US, UK and German government bond markets also added to
performance, as yields signifi cantly declined (prices move inversely to yields).
The second half of 2018 delivered small positive total and excess credit returns, despite global investment grade credit spreads widening
signifi cantly in November and December. Global investment grade bonds suff ered, as volatility (sharper fl uctuations in prices) increased and
global market sentiment deteriorated in light of elevated geopolitical and macroeconomic apprehensions. In particular, concerns over the
US-China trade dispute, Italy and Brexit dominated investors’ attention. In Europe, continued investment grade outfl ows alongside heavy
net supply over the year also negatively impacted European investment grade total and excess credit returns. Conversely, US investment
benefi ted from more favourable dynamics.
The latter part of the review period delivered strong positive total and excess credit returns. Despite bouts of market weakness over the six
months, credit spreads compressed on the back of a constructive market tone, which was largely driven by the US Federal Reserve and
European Central Bank taking on a more dovish tilt, and expectations of a trade deal between the US and China. Positive fl ows into Euro
and US investment grade bonds, buoyed by a search for yield among investors, also supported credit spreads.
Investment report for the period from 1 July 2018 to 28 February 2019
65
Global Corporate Bond Fund
Statement of Net Assets
As at 28 February 2019Notes USD
Assets
Investment in securities at market value 3 -Cash at bank 12 31,370 Interest and dividends receivable 3 -Subscriptions receivable -Receivable for investments sold -Unrealised gain on contracts for diff erence 3 -Unrealised gain on futures contracts 3 -Unrealised gain on forward foreign exchange contracts 3 -Purchased option contracts at market value 3 -Swap contracts at market value 3 -Other assets -Management fee rebate -Total assets 31,370
Liabilities
Bank overdraft 12 26 Payable for investments purchased -Taxes and expenses payable 21,786 Redemptions payable -Unrealised loss on contracts for diff erence 3 -Unrealised loss on futures contracts 3 -Unrealised loss on forward foreign exchange contracts 3 -Sold option contracts at market value 3 -Swap contracts at market value 3 -Dividends payable to shareholders -Interest and dividends payable on CFD -Other liabilities 9,558 Total liabilities 31,370
Net assets at the end of the period -
Statement of Operations
For the period from 1 July 2018 to 28 February 2019Notes USD
Income
Dividend income (net of withholding tax) 3 -Bond interest income 3 392,828 Income from collective investment schemes 3 -Derivative income 3 -Interest received on contracts for diff erence 3 -Other income 3, 13 16,970 Total income 409,798
Expenses
Management fees 6, 14 73,962 Administration, registrar and transfer agent fees 6 969 Custodian fees 6 4,966 Shareholder servicing fees and distribution fees 6, 14 658 Depositary fees 6 412 Other expenses 6 27,012 Derivative expenses 3 6,958 Interest paid on contracts for diff erence 3 -Performance fees 6 -Taxation ("taxe d'abonnement") 7 1,141 Total expenses 116,078
Net income from investments 293,720
Net realised gain/(loss)
Net realised loss on investment securities 3 (588,765) Net realised gain/loss on contracts for diff erence 3 -Net realised loss on futures contracts 3 (8,527) Net realised gain on swap contracts 3 18,851 Net realised gain/loss on options contracts 3 -Net realised gain on forward foreign exchange contracts 3 293,568 Net realised gain on currency exchange 5,378
Net realised loss on investments and derivatives (279,495)
Net change in unrealised appreciation/
depreciation
Change in net unrealised appreciation/depreciation on investments
3 575,399
Change in net unrealised appreciation/depreciation on contracts for diff erence
3 -
Change in net unrealised appreciation/depreciation on futures contracts
3 (3,766)
Change in net unrealised appreciation/depreciation on swap contracts
3 (15,420)
Change in net unrealised appreciation/depreciation on options contracts
3 -
Change in net unrealised appreciation/depreciation on forward foreign exchange contracts
3 14,619
Change in net unrealised appreciation/depreciation on currency exchange
348
Change in unrealised appreciation/depreciation on investments and derivatives
571,180
Net increase in assets as a result of operations 585,405
The accompanying notes form an integral part of these fi nancial statements.
66
Global Corporate Bond Fund
Statement of Changes in Net Assets
For the period from 1 July 2018 to 28 February 2019Notes USD Notes USD
Net assets at the beginning of the period 21,154,209 Proceeds from shares issued -Net income from investments 293,720 Payments for shares redeemed (21,338,159) Net realised loss on investments and derivatives (279,495) Net equalisation (paid)/received 10 (401,455) Change in unrealised appreciation/depreciation on investments and derivatives
571,180 Dividend distributions 11 -
Net assets at the end of the period -
Share Transactions
For the period from 1 July 2018 to 28 February 2019A2
(USD)
A2 HEUR
(EUR)
H2
(USD)
H2 HEUR
(EUR)
I2
(USD)
I2 HEUR
(EUR)
Shares outstanding at the beginning of the period 1,457.30 400.49 500.00 25.00 179,974.77 8,009.76Shares issued during the period - - - - - -Shares redeemed during the period (1,457.30) (400.49) (500.00) (25.00) (179,974.77) (8,009.76)Shares outstanding at the end of the period - - - - - -
Equivalent to a net asset value per share of: 111.44* 103.73* 113.28* 97.52* 113.64* 105.70*
X2
(USD)
Shares outstanding at the beginning of the period 500.00Shares issued during the period -Shares redeemed during the period (500.00)Shares outstanding at the end of the period -
Equivalent to a net asset value per share of: 109.87*
* Class closed on 28 February 2019 and this is the fi nal price.
TER is calculated in accordance with SFAMA (Swiss Funds and Asset Management Association).There were no performance fees on the fund as at 28 February 2019.
Performance history (unaudited)
Fund & Benchmark Since launch to
30 Jun 15
1 year to
30 Jun 16
1 year to
30 Jun 17
1 year to
30 Jun 18
1 July 18 to
28 Feb 19**
% % % % %
Global Corporate Bond Fund* A2 (USD) 0.48 5.58 2.68 (0.29) 2.60 Barclays Global Aggregate Corporate Bond Index 0.27 7.07 2.84 0.58 3.29
Performance quoted in the investment report relates to Class A2 (USD) shares.* On 5 November 2014, the Global Corporate Bond Fund was launched.** Global Corporate Bond Fund closed on 28 February 2019.
Past performance is not a guide to future performance.
68
Global Corporate Bond Fund
Top ten changes in the securities portfolio for the period
from 1 July 2018 to 28 February 2019
Description of Securities Purchases Sales
USD USD
United Kingdom
CYBG 4.00% 25/09/2026 261,732 -
United States
US Treasury 0.00% 02/05/2019 2,987,114 2,987,453
US Treasury 0.00% 08/08/2019 1,977,327 1,978,319
US Treasury 0.00% 09/05/2019 2,985,734 2,986,035
US Treasury 0.00% 15/08/2019 5,928,979 5,931,848
US Treasury 0.00% 16/05/2019 2,984,310 2,984,696
US Treasury 0.00% 30/01/2020 1,952,754 1,954,173
US Treasury 1.125% 15/01/2019 499,609 500,000
US Treasury 2.50% 31/12/2020 999,258 999,688
US Treasury 3.00% 15/08/2048 289,945 -
US Treasury 4.50% 15/08/2039 - 413,016
US Treasury 4.75% 15/02/2037 - 511,516
69
Global High Yield Bond Fund
Investment Fund Managers
Seth Meyer and Tom Ross
The fund returned 9.5% based on Class A2 US Dollar terms over the year under review, compared with the ICE BofA Merrill Lynch Global
High Yield Constrained Index which returned 8.6%.
Global high yield credit delivered a strong positive total return, driven by positive excess credit returns (versus government) and credit
spread tightening in the second half of the review year. Movements in US and German government bonds also added to performance, as
yields in both asset classes signifi cantly declined.
The year was one of two halves. The second half of 2018 delivered negative total and excess credit returns (versus governments) with
credit spreads widening signifi cantly in November and December 2018. Global high yield bonds suff ered towards the end of 2018,
as volatility increased and global market sentiment deteriorated in light of elevated geopolitical and macroeconomic apprehensions. In
particular, concerns over the US-China trade dispute, recessionary risks, oil price stability and Brexit dominated investors’ attention,
impacting sentiment. Within the European high yield market, idiosyncratic weakness also adversely impacted the market’s tone, with
numerous European high yield companies seeing sharp price declines after negative news. US and European high yield saw signifi cant
outfl ows over the year, which further contributed to the weak excess credit returns. In contrast, the latter part of the review year delivered
strong positive total and excess credit returns. Despite bouts of market weakness over the six months, credit spreads compressed on the
back of a constructive market tone, which was largely driven by the US Federal Reserve (Fed) and European Central Bank (ECB) taking on
a more dovish tilt, and expectations of a trade deal between the US and China. Supportive global high yield market dynamics also helped
performance as US and European high yield saw positive fl ows over the year, driven by investors’ strong search for yield.
On a regional basis, emerging market high yield delivered the strongest excess credit returns (versus governments) followed by emerging
market and then US high yield.
Positive relative performance largely came from security selection, with fund underweights to CMA, Weatherford and Casino adding
particularly to performance. Strong relative performance also came from a credit default swap short risk position in French industrial
company Novafi ves in 2018, which we closed following weak earnings and material spread widening. At the asset allocation level, positive
performance also came from the fund’s overweight to the healthcare and leisure sectors.
Negative relative performance came from the fund’s underweight to emerging markets and overweight to Europe. In the last six months of
the year, negative relative performance at the asset allocation level came from the fund’s being underweight credit risk, given the strength
in markets. On a single name basis, the majority of underperformance came from issuers in which the fund was underweight, including The
Ardonagh Group and Wind Tre.
We have become more positive on global high yield credit, and we have subsequently increased risk marginally to take the fund to a neutral
risk position versus the benchmark. Despite the weak economic backdrop, we have become more constructive after dovish rhetoric in June
from the Fed and the ECB. Within high yield specifi cally, we are particularly positive about European high yield and, therefore, continue
to be overweight this region. In contrast, we are underweight the US and emerging market high yield regions. We believe credit spreads
in European high yield may tighten further as large volumes of negative yielding European government and corporate bonds – along with
the ECB continuing to support markets and potentially restarting asset purchases – may cause demand for European high yield to be
particularly strong. From a valuation perspective, the asset class remains attractive on a risk adjusted basis relative to US high yield, which
may also help to entice investors into European high yield bonds.
We acknowledge that the macro landscape remains fraught with geopolitical and economic threats. While the US and China agreed
at the G20 summit to restart trade negotiations, confl ict between the two parties remains unresolved and is likely to continue to linger.
Italian politics, Brexit negotiations, oil price stability and a resurgence of fund outfl ows also remain key threats to global high yield stability.
Valuations have become less attractive, with credit spreads (versus government) in the index now closer to their 3-year average levels
(currently 421 basis points (bps); 3-year average 415bps; 5-year average 476bps). However, despite less appealing valuations and
uncertain economic conditions, we believe in the short term that the dovish support from the US and European central banks, alongside a
strong search for yield among investors, could cause European high yield credit spreads to tighten further.
Given the above, we believe a fl at risk position to the benchmark, composed of an overweight to Europe off set by underweights to the US
and emerging markets, is warranted. As ever, we remain focused on using bottom-up stock selection and an understanding of idiosyncratic
risk – which we continue to believe will be of vital importance in 2019 – to drive returns.
Investment report for the year from 1 July 2018 to 30 June 2019
70
Global High Yield Bond Fund
Statement of Net Assets
As at 30 June 2019Notes USD
Assets
Investment in securities at market value 3 314,859,999 Cash at bank 12 22,304,026 Interest and dividends receivable 3 4,228,035 Subscriptions receivable 6,578,819 Receivable for investments sold 4,620,777 Unrealised gain on contracts for diff erence 3 -Unrealised gain on futures contracts 3 693,223 Unrealised gain on forward foreign exchange contracts 3 1,228,737 Purchased option contracts at market value 3 -Swap contracts at market value 3 949,446 Other assets -Management fee rebate -Total assets 355,463,062
Liabilities
Bank overdraft 12 -Payable for investments purchased 10,283,184 Taxes and expenses payable 692,346 Redemptions payable 2,655,797 Unrealised loss on contracts for diff erence 3 -Unrealised loss on futures contracts 3 249,317 Unrealised loss on forward foreign exchange contracts 3 1,472,666 Sold option contracts at market value 3 -Swap contracts at market value 3 1,328,442 Dividends payable to shareholders 777,020 Interest and dividends payable on CFD -Other liabilities -Total liabilities 17,458,772
Net assets at the end of the year 338,004,290
Statement of Operations
For the year from 1 July 2018 to 30 June 2019Notes USD
Income
Dividend income (net of withholding tax) 3 -Bond interest income 3 10,409,081 Income from collective investment schemes 3 -Derivative income 3 10,364 Interest received on contracts for diff erence 3 -Other income 3, 13 253,210 Total income 10,672,655
Expenses
Management fees 6, 14 1,141,486 Administration, registrar and transfer agent fees 6 88,970 Custodian fees 6 30,367 Shareholder servicing fees and distribution fees 6, 14 255,252 Depositary fees 6 10,542 Other expenses 6 105,368 Derivative expenses 3 470,990 Interest paid on contracts for diff erence 3 -Performance fees 6 133,506 Taxation ("taxe d'abonnement") 7 62,793 Total expenses 2,299,274
Net income from investments 8,373,381
Net realised gain/(loss)
Net realised loss on investment securities 3 (40,985) Net realised gain/loss on contracts for diff erence 3 -Net realised gain on futures contracts 3 78,344 Net realised gain on swap contracts 3 1,352,165 Net realised gain/loss on options contracts 3 -Net realised loss on forward foreign exchange contracts 3 (795,901) Net realised gain on currency exchange 50,386
Net realised gain on investments and derivatives 644,009
Net change in unrealised appreciation/
depreciation
Change in net unrealised appreciation/depreciation on investments
3 9,447,740
Change in net unrealised appreciation/depreciation on contracts for diff erence
3 -
Change in net unrealised appreciation/depreciation on futures contracts
3 433,428
Change in net unrealised appreciation/depreciation on swap contracts
3 (1,194,018)
Change in net unrealised appreciation/depreciation on options contracts
3 -
Change in net unrealised appreciation/depreciation on forward foreign exchange contracts
3 (169,987)
Change in net unrealised appreciation/depreciation on currency exchange
33,387
Change in unrealised appreciation/depreciation on investments and derivatives
8,550,550
Net increase in assets as a result of operations 17,567,940
The accompanying notes form an integral part of these fi nancial statements.
71
Global High Yield Bond Fund
Statement of Changes in Net Assets
For the year from 1 July 2018 to 30 June 2019Notes USD Notes USD
Net assets at the beginning of the year 125,964,638 Proceeds from shares issued 277,241,934 Net income from investments 8,373,381 Payments for shares redeemed (86,410,206) Net realised gain on investments and derivatives 644,009 Net equalisation (paid)/received 10 6,233,845 Change in unrealised appreciation/depreciation on investments and derivatives
8,550,550 Dividend distributions 11 (2,593,861)
Net assets at the end of the year 338,004,290
Share Transactions
For the year from 1 July 2018 to 30 June 2019A2
(USD)
A2 HEUR
(EUR)
A3
(USD)
A3 HEUR
(EUR)
F2
(USD)
H2
(USD)
Shares outstanding at the beginning of the year 218,713.67 48,108.76 84,944.21 94,655.70 2,716.68 25.00Shares issued during the year 512,329.46 30,319.20 156,381.94 44,685.21 87,380.83 177.43Shares redeemed during the year (111,958.05) (34,994.28) (64,898.68) (16,173.74) (39,095.28) -Shares outstanding at the end of the year 619,085.08 43,433.68 176,427.47 123,167.17 51,002.23 202.43
Equivalent to a net asset value per share of: 143.92 132.77 106.52 93.07 111.84 109.91
H2 HEUR
(EUR)
H3 HEUR
(EUR)
I2
(USD)
I2 HEUR
(EUR)
X2
(USD)
Z2 HGBP
(GBP)
Shares outstanding at the beginning of the year 1,202.07 25.43 224,776.82 140,263.03 20,233.86 42,019.86Shares issued during the year 2,102.67 6,132.64 811,421.82 153,965.14 158,134.14 45,589.47Shares redeemed during the year (3,279.74) - (177,829.13) (187,764.83) (31,015.95) (464.21)Shares outstanding at the end of the year 25.00 6,158.07 858,369.51 106,463.34 147,352.05 87,145.12
Equivalent to a net asset value per share of: 105.31 96.82 146.99 135.75 111.25 140.15
Z3 HAUD
(AUD)
Z3 HGBP
(GBP)
Shares outstanding at the beginning of the year 116,189.77 15,003.07Shares issued during the year 241,611.08 3,715.00Shares redeemed during the year - -Shares outstanding at the end of the year 357,800.85 18,718.07
Equivalent to a net asset value per share of: 107.52 108.45
TER is calculated in accordance with SFAMA (Swiss Funds and Asset Management Association).The amounts earned in relation to performance fees for the year are shown in note 6 to the fi nancial statements.The TER includes performance fees as at 30 June 2019.
Performance history (unaudited)
Fund & Benchmark 1 year to 1 year to 1 year to 1 year to 1 year to
30 Jun 15 30 Jun 16 30 Jun 17 30 Jun 18 30 Jun 19
% % % % %
Global High Yield Bond Fund A2 (USD) 1.94 1.17 14.10 2.66 9.46
ICE BofA Merrill Lynch Global High Yield Constrained Index 0.03 3.04 12.37 2.09 8.62
Performance quoted in the investment report relates to Class A2 (USD) shares.
Past performance is not a guide to future performance.
73
Portfolio as at 30 June 2019 (continued)
Number
of Securities
Market
Value
USD
% of
Net
Assets
France 1.78%
Fixed Rate Bond 1.54%
EUR 500,000 Altice France 5.875% 01/02/2027 617,691 0.18
Transferable securities and money market instruments admitted to an offi cial exchange listing and/or dealt on another regulated market, unless otherwise stated.
Inter Media and Communication 4.875% 31/12/2022 3,225,400 1,834,890
Netherlands
LeasePlan 7.375% Perpetual 3,484,728 -
Ziggo 7.125% 15/05/2024 4,148,910 2,148,513
Sweden
Ericsson 1.875% 01/03/2024 - 1,867,117
United Kingdom
CYBG 4.00% 25/09/2026 - 1,948,520
Virgin Media Secured Finance 5.50% 15/01/2025 - 1,905,287
United States
CommScope Finance 8.25% 01/03/2027 4,511,040 -
DaVita 5.00% 01/05/2025 - 1,800,725
Endo Finance Issuers 6.00% 01/02/2025 - 2,534,368
GCI 6.625% 15/06/2024 3,090,403 -
General Electric 5% Perpetual 3,663,376 -
HCA 5.375% 01/02/2025 3,368,152 -
Jewel UK Bondco 8.50% 15/04/2023 - 1,911,105
Stericycle 5.375% 15/07/2024 3,151,119 -
Western Digital 4.75% 15/02/2026 3,049,664 -
79
Strategic Bond Fund
Investment Fund Managers
Jenna Barnard & John Pattullo
The fund returned 8.5% based on Class A2 US Dollar terms over the year under review.
The year under review was a seminal year for most bond investors and central bankers. It revealed that the road to rising infl ation and
interest rate ‘normalisation’ was not the one that they had hoped for, nor had their dated economic models (the Philips Curve, for example)
warned them. We have termed this ‘the point of realisation’. Indeed, the structural factors which have, for many years, served to weigh
down growth and infl ation have proved too strong and, at the fi rst sign of a cyclical deceleration, central bankers across the developed
world fl ipped to rate cutting mode. Even in the most ‘normal’ economy – the US – we have learnt some profound truths about the outlook
for interest rates and, therefore, bond yields. This continues to fi lter through in the performance of every asset class in the developed world.
Firstly, rates (the eff ective federal funds rate) peaked at 2.4% this cycle versus 5.25% in the last cycle. Infl ation has structurally undershot its
target for 10 years. Quantitative easing (QE) could not be reversed in full. If this is true in the US, there is little hope for interest rates going
up in the rest of the developed world.
Fund performance was strong both on an absolute and a relative basis. The key determinant of this return has been duration management.
Firstly, the aggregate duration of the fund has been run at a high level through most of the review year. We disagreed with the consensus
view of higher interest rates and higher bond yields in the second half of 2018 and positioned accordingly, with high sensitivity to bond
yields. This proved the correct decision as we reached an infl ection point in this business cycle’s interest rate policy, particularly in the
US. We also positioned to take advantage of continued interest rate divergence across the developed world. Of particular note were the
holdings in Australian government bonds, which proved a strong driver of performance as the Reserve Bank of Australia was forced to cut
interest rates twice in the summer of 2019 following weak employment and infl ation data. Feeding from this duration view was a preference
for longer dated investment grade (higher quality) corporate bonds in the portfolio. Locking in long dated income streams seemed a
preferable choice to moving down the credit spectrum to shorter dated, lower quality high yield bonds. Many of our purchases were focused
on this area – on US Dollar investment grade bonds in late 2018 and, in 2019, increasingly on Euro denominated bonds (partly based on
the expectation that the European Central Bank (ECB) would reinitiate its purchases of such bonds as part of a new QE scheme). Over
the course of the year, all bond markets performed strongly, including high yield and fi nancial bonds, but the latter markets experienced
considerable drawdown in late 2018, of which we avoided the worst via our asset allocation described above.
Derivatives continued to be used in order to quickly and cheaply reposition the fund. In aggregate, this provided a strong boost to fund
performance, which was driven by interest rate (government bond) futures. Other derivatives were utilised predominantly to hedge the
portfolio against a sell-off in risk assets, making a small negative contribution to performance, but were more than off set by the gains from
duration management.
At the time of writing, in July 2019, it is clear that the much hoped for V-shaped recovery in global growth is unlikely. Firstly, the China
stimulus narrative was overhyped (or just plain wrong) in early 2019 and data from China and Asia remains weak. We have written about
this misunderstanding of Chinese credit data since February, but the actual economic data in the second quarter proves correct our view
that this is likely to be a prolonged slump. Secondly, the rest of the world’s data did not catch up to the US – instead, US manufacturing
has been dragged down with the rest of the world. Again, the consensus got this wrong. Finally, as a result, central banks have ‘surprised’
investors with their talk of rate cuts and more QE. Australia has cut rates twice this quarter, the ECB has set up for cuts and more QE, and
the US Federal Reserve has talked of cuts. To reiterate our view of this downturn, it is an industrial/manufacturing downturn that started in
Asia and, therefore, hurts Europe a lot (European exporters have a high dependency on Asia). Thus, this is the fi rst serious non-US sourced
downturn since 1998. The US is likely to be the most insulated of the major economies from this downturn, but it won’t be immune. We
have now had 13 consecutive quarters of declining global manufacturing data. This is a prolonged downturn, and it is starting to seep into
services sectors and some employment markets (such as Germany and Australia – with signs even in the US).
Investment report for the year from 1 July 2018 to 30 June 2019
80
Strategic Bond Fund
Statement of Net Assets
As at 30 June 2019Notes USD
Assets
Investment in securities at market value 3 40,885,132 Cash at bank 12 3,528,793 Interest and dividends receivable 3 343,596 Subscriptions receivable 586,687 Receivable for investments sold -Unrealised gain on contracts for diff erence 3 -Unrealised gain on futures contracts 3 28,852 Unrealised gain on forward foreign exchange contracts 3 30,069 Purchased option contracts at market value 3 -Swap contracts at market value 3 -Other assets -Management fee rebate -Total assets 45,403,129
Liabilities
Bank overdraft 12 -Payable for investments purchased 1,989,618 Taxes and expenses payable 68,406 Redemptions payable -Unrealised loss on contracts for diff erence 3 -Unrealised loss on futures contracts 3 -Unrealised loss on forward foreign exchange contracts 3 370,277 Sold option contracts at market value 3 -Swap contracts at market value 3 15,506 Dividends payable to shareholders 9,296 Interest and dividends payable on CFD -Other liabilities -Total liabilities 2,453,103
Net assets at the end of the year 42,950,026
Statement of Operations
For the year from 1 July 2018 to 30 June 2019Notes USD
Income
Dividend income (net of withholding tax) 3 13,244 Bond interest income 3 802,280 Income from collective investment schemes 3 -Derivative income 3 754 Interest received on contracts for diff erence 3 -Other income 3, 13 66,535 Total income 882,813
Expenses
Management fees 6, 14 184,509 Administration, registrar and transfer agent fees 6 8,167 Custodian fees 6 8,642 Shareholder servicing fees and distribution fees 6, 14 20,617 Depositary fees 6 1,707 Other expenses 6 24,065 Derivative expenses 3 13,568 Interest paid on contracts for diff erence 3 -Performance fees 6 -Taxation ("taxe d'abonnement") 7 5,822 Total expenses 267,097
Net income from investments 615,716
Net realised gain/(loss)
Net realised loss on investment securities 3 (341,141) Net realised gain/loss on contracts for diff erence 3 -Net realised gain on futures contracts 3 239,837 Net realised loss on swap contracts 3 (11,317) Net realised loss on options contracts 3 (3,153) Net realised gain on forward foreign exchange contracts 3 808,294 Net realised gain on currency exchange 4,852
Net realised gain on investments and derivatives 697,372
Net change in unrealised appreciation/
depreciation
Change in net unrealised appreciation/depreciation on investments
3 1,766,552
Change in net unrealised appreciation/depreciation on contracts for diff erence
3 -
Change in net unrealised appreciation/depreciation on futures contracts
3 7,306
Change in net unrealised appreciation/depreciation on swap contracts
3 (14,645)
Change in net unrealised appreciation/depreciation on options contracts
3 -
Change in net unrealised appreciation/depreciation on forward foreign exchange contracts
3 (393,607)
Change in net unrealised appreciation/depreciation on currency exchange
(381)
Change in unrealised appreciation/depreciation on investments and derivatives
1,365,225
Net increase in assets as a result of operations 2,678,313
The accompanying notes form an integral part of these fi nancial statements.
81
Strategic Bond Fund
Statement of Changes in Net Assets
For the year from 1 July 2018 to 30 June 2019Notes USD Notes USD
Net assets at the beginning of the year 24,424,283 Proceeds from shares issued 17,625,498 Net income from investments 615,716 Payments for shares redeemed (2,123,817) Net realised gain on investments and derivatives 697,372 Net equalisation (paid)/received 10 364,487 Change in unrealised appreciation/depreciation on investments and derivatives
1,365,225 Dividend distributions 11 (18,738)
Net assets at the end of the year 42,950,026
Share Transactions
For the year from 1 July 2018 to 30 June 2019A2
(USD)
A2 HEUR
(EUR)
H2 HEUR
(EUR)
H3 HEUR
(EUR)
IU2
(USD)
X2
(USD)
Shares outstanding at the beginning of the year 8,604.43 805.25 25.33 25.62 226,039.38 7,990.23Shares issued during the year 53,743.25 - 4,181.77 11,551.54 30,797.11 71,311.11Shares redeemed during the year (671.75) (779.92) - - (17,799.60) (1,958.74)Shares outstanding at the end of the year 61,675.93 25.33 4,207.10 11,577.16 239,036.89 77,342.60
Equivalent to a net asset value per share of: 108.49 102.57 103.20 98.24 109.33 107.74
Transferable securities and money market instruments admitted to an offi cial exchange listing and/or dealt on another regulated market, unless otherwise stated.
Equities 0.46%
United Kingdom 0.46%
Financials 0.46%
1,020 Nationwide Building Society CDDS 195,533 0.46
Bonds 94.73%
Australia 10.22%
Fixed Rate Bond 10.22%
AUD 350,000 Australia (Commonwealth of) 1.75% 21/11/2020 247,953 0.58
AUD 1,750,000 Australia (Commonwealth of) 2.25% 21/05/2028 1,325,022 3.08
AUD 844,000 Australia (Commonwealth of) 2.75% 21/04/2024 639,883 1.49
AUD 2,000,000 Australia (Commonwealth of) 2.75% 21/11/2028 1,579,503 3.67
AUD 645,000 Australia (Commonwealth of) 3.75% 21/04/2037 599,479 1.40
US Treasury Index-Linked 1.00% 15/02/2049 - 388,179
87
Total Return Bond Fund
Investment Fund Managers
Andrew Mulliner and Chris Diaz
The fund returned 2.1% based on Class A2 Euro terms over the year under review.
The second half of 2018 saw weakness in most asset classes as investors worried about the prospects of continued interest rate hikes by
the US Federal Reserve (Fed). The Fed duly delivered a series of three interest hikes over the course of 2018, with the fi nal in December.
This led to poor performance from credit, particularly in fourth quarter, prompting a rally in government bonds. However, as global growth,
infl ation expectations and equity markets headed downward, the Fed was forced to back-track. Other major central banks followed on
this dovish path, with the Reserve Banks of Australia and New Zealand cutting rates, and the growing possibility of fresh stimulus by the
European Central Bank (ECB).
All the while, trade tensions and geopolitical risks remained in the spotlight and economic data continued to exhibit a weakening trend.
Thus, ‘bad news is good news’ became true once again, with the expectation that renewed central bank support could extend the cycle. As
a result, corporate credit and emerging markets bounced back strongly in 2019 due to renewed risk appetite as falling interest rates pushed
more bond yields into negative territory, particularly in Europe. By the end of the year, around 25% of the Global Aggregate Index had a yield
at or below zero, amounting to more than $12 trillion.
The fund delivered a positive return but lagged broader bond markets (as measured by the Barclays Multiverse) mainly due to weaker
performance in the second half of 2018. Increased exposure to government debt was benefi cial for performance; however, our positioning in
emerging market credit and currency strategies detracted.
From a credit perspective, positioning in the fund has been increasingly defensive; we’ve favoured high quality investment grade asset- and
mortgage-backed securities (ABS and MBS). Over the year, exposure to fl oating-rate credit assets such as ABS, MBS and secured loans
added value, and proved resilient to the interest rate and equity market volatility. We retain a cautious stance towards high yield corporate
debt in developed markets and hold credit hedges against existing bond holdings. These hedges were a modest drag on performance in
the second half of the year.
Holdings in emerging market credit detracted from relative results: the fund benefi ted from holdings in Brazilian corporates and Chinese
fi nancials and real estate issuers, while exposure to Argentina and telecommunications company Digicel detracted.
The choppy environment for government bond markets in the second half of 2018 (in which yields rose in the third quarter but subsequently
rallied in November and December) led to moderate underperformance from tactical strategies. In response to the weaker global economic
environment and move towards greater easing by the major central banks, we have continued to increase exposure to ‘safe haven’
government bond markets in 2019, moving the fund to a position of maximum interest rate duration (six years). This has been a signifi cant
contributor to performance year-to-date.
Alongside the US, this allocation has been focused in areas such as Australia, New Zealand, Sweden and long maturity European rates.
Within emerging markets, a standout contributor over the quarter was a position in Mexico, where fi ve-year yields fell by around 50 basis
points. We expect rates to be cut from restrictive levels as infl ation slows and the pressure from interest rate increases in the US abates.
Within infl ation markets, a position expecting UK infl ation to fall detracted, as Brexit concerns kept Sterling under pressure.
Currency strategies detracted from performance overall. For most of 2018, the fund was positioned for a weaker US Dollar and for the
appreciation of the Colombian Peso on the expectation of higher rates and resilient oil prices. These positions were closed at a loss, as
the US Dollar outperformed in the fourth quarter as the Fed continued to raise rates. At the start of 2019, we increased our position in the
Norwegian Krone, held against a basket of the Euro, Swedish Krona and Canadian Dollar, on the expectation of rate hikes from the Norges
Bank relative to the central banks of other developed markets, which performed well. Later in the fi rst quarter, exposure to emerging market
currencies was increased, including our exposure to Latin America. We closed a position expecting the Brazilian Real to rise versus the
Mexican Peso, as our confi dence that pension reform would progress quickly in Brazil was reduced.
The weakening trend in economic data has become more widespread, but exceptionally accommodative monetary policy from the major
central banks is working to off set this. We believe it has the potential to elongate the cycle.
We expect central banks to maintain an easing bias and continue to favour countries and yield curves where there is positive yield and
scope to cut rates. We continue to favour the return potential of longer-dated sovereign bonds. Within credit markets, it is very much a
battle between strong technicals driven by the insatiable hunt for yield and a weakening of the macroeconomic backdrop and fundamentals.
In the short term, we expect the former to create scope for credit spreads to rally further, despite the longer term fragilities caused by broad-
based corporate leverage and a deteriorating cycle.
Please note that with eff ect from 17 January 2019, Ryan Myerberg was replaced as Fund Manager for this fund by Chris Diaz.
Investment report for the year from 1 July 2018 to 30 June 2019
88
Total Return Bond Fund
Statement of Net Assets
As at 30 June 2019Notes EUR
Assets
Investment in securities at market value 3 724,115,213 Cash at bank 12 77,697,071 Interest and dividends receivable 3 7,463,800 Subscriptions receivable -Receivable for investments sold 4,476,979 Unrealised gain on contracts for diff erence 3 -Unrealised gain on futures contracts 3 1,165,826 Unrealised gain on forward foreign exchange contracts 3 5,067,022 Purchased option contracts at market value 3 -Swap contracts at market value 3 15,285,534 Other assets -Management fee rebate -Total assets 835,271,445
Liabilities
Bank overdraft 12 9,530 Payable for investments purchased 5,012,867 Taxes and expenses payable 532,606 Redemptions payable 9,991 Unrealised loss on contracts for diff erence 3 -Unrealised loss on futures contracts 3 1,551,689 Unrealised loss on forward foreign exchange contracts 3 4,783,076 Sold option contracts at market value 3 -Swap contracts at market value 3 14,899,055 Dividends payable to shareholders 1,615 Interest and dividends payable on CFD -Other liabilities -Total liabilities 26,800,429
Net assets at the end of the year 808,471,016
Statement of Operations
For the year from 1 July 2018 to 30 June 2019Notes EUR
Income
Dividend income (net of withholding tax) 3 -Bond interest income 3 21,649,733 Income from collective investment schemes 3 -Derivative income 3 1,419,464 Interest received on contracts for diff erence 3 -Other income 3, 13 419,606 Total income 23,488,803
Expenses
Management fees 6, 14 191,623 Administration, registrar and transfer agent fees 6 233,862 Custodian fees 6 78,891 Shareholder servicing fees and distribution fees 6, 14 36,160 Depositary fees 6 60,394 Other expenses 6 617,040 Derivative expenses 3 168,672 Interest paid on contracts for diff erence 3 -Performance fees 6 -Taxation ("taxe d'abonnement") 7 91,684 Total expenses 1,478,326
Net income from investments 22,010,477
Net realised gain/(loss)
Net realised gain on investment securities 3 5,200,838 Net realised gain/loss on contracts for diff erence 3 -Net realised loss on futures contracts 3 (1,651,649) Net realised loss on swap contracts 3 (3,103,810) Net realised loss on options contracts 3 (2,028,973) Net realised loss on forward foreign exchange contracts 3 (33,565,910) Net realised loss on currency exchange (1,286,329)
Net realised loss on investments and derivatives (36,435,833)
Net change in unrealised appreciation/
depreciation
Change in net unrealised appreciation/depreciation on investments
3 21,713,923
Change in net unrealised appreciation/depreciation on contracts for diff erence
3 -
Change in net unrealised appreciation/depreciation on futures contracts
3 (100,707)
Change in net unrealised appreciation/depreciation on swap contracts
3 9,883,398
Change in net unrealised appreciation/depreciation on options contracts
3 1,729,813
Change in net unrealised appreciation/depreciation on forward foreign exchange contracts
3 9,503,858
Change in net unrealised appreciation/depreciation on currency exchange
(83,475)
Change in unrealised appreciation/depreciation on investments and derivatives
42,646,810
Net increase in assets as a result of operations 28,221,454
The accompanying notes form an integral part of these fi nancial statements.
89
Total Return Bond Fund
Statement of Changes in Net Assets
For the year from 1 July 2018 to 30 June 2019Notes EUR Notes EUR
Net assets at the beginning of the year 933,961,557 Proceeds from shares issued 15,806,431 Net income from investments 22,010,477 Payments for shares redeemed (167,005,057) Net realised loss on investments and derivatives (36,435,833) Net equalisation (paid)/received 10 (2,496,118) Change in unrealised appreciation/depreciation on investments and derivatives
42,646,810 Dividend distributions 11 (17,251)
Net assets at the end of the year 808,471,016
Share Transactions
For the year from 1 July 2018 to 30 June 2019A2
(EUR)
A2 HUSD
(USD)
A3
(EUR)
F2 HUSD
(USD)
H2
(EUR)
H3
(EUR)
Shares outstanding at the beginning of the year 322,904.26 26,300.09 12,804.39 27,111.28 563.29 25.23Shares issued during the year 2,979.18 2,126.88 437.58 25.00 30.82 0.69Shares redeemed during the year (321,879.80) (19,168.99) (10,431.13) (27,111.28) (25.06) -Shares outstanding at the end of the year 4,003.64 9,257.98 2,810.84 25.00 569.05 25.92
Equivalent to a net asset value per share of: 110.81 120.76 87.15 104.93 105.10 95.42
I2
(EUR)
X2
(EUR)
Z2 HGBP
(GBP)
Shares outstanding at the beginning of the year 12,133.56 1,025.45 6,509,118.11Shares issued during the year 154,384.23 118.88 1,293.37Shares redeemed during the year (166,490.36) (557.50) (797,314.74)
Shares outstanding at the end of the year 27.43 586.83 5,713,096.74
Equivalent to a net asset value per share of: 100.11 99.92 126.67
USD 800,000 Times China 10.95% 27/11/2020 757,303 0.09
13,240,160 1.64
Total Return Bond Fund
Portfolio as at 30 June 2019 (continued)
Number
of Securities
Market
Value
EUR
% of
Net
Assets
Transferable securities and money market instruments admitted to an offi cial exchange listing and/or dealt on another regulated market, unless otherwise stated.
Bonds 89.56%
Argentina 0.33%
Fixed Rate Bond 0.33%
USD 690,000 Aguas y Saneamientos Argentinos 6.625% 01/02/2023
451,614 0.06
USD 610,000 Argentina (Republic of) 6.875% 22/04/2021
US Treasury 2.50% 15/05/2046 58,961,932 30,749,883
US Treasury 2.625% 15/02/2029 79,168,271 28,221,502
US Treasury 2.75% 15/02/2028 33,778,364 34,562,521
US Treasury Infl ation Index 0.50% Index-Linked 15/01/2028
81,086,771 119,301,620
102
Asian Dividend Income Fund
Investment Fund Managers
Michael Kerley and Sat Duhra
The fund returned 5.0% based on Class A2 US Dollar terms over the year under review, compared with the MSCI AC Asia Pacifi c ex Japan
High Dividend Yield Index, which returned 3.3%.
The benchmark’s performance may appear reasonably fl at in the year under review, but this masks a volatile period in the last quarter of
2018 for Asia. Global growth fears surfaced and were compounded by escalating trade tensions between the US and China, rising
US interest rates and a stronger US Dollar. However, there was a sharp rebound to recover these losses in the fi rst quarter of 2019 as
sentiment shifted. Investors turned more positive with respect to relations between the US and China, and the US Federal Reserve (Fed)
indicated that the end to fi scal and monetary tightening would be earlier than expected. As expectations for interest rate hikes turned rapidly
to interest rate cuts from the Fed, income stocks in Asia became key benefi ciaries; US bond yields fell and income appeared to be back in
favour amid rising geopolitical risk. A number of Asian central banks cut or indicated a future cut in interest rates. This created a favourable
backdrop for the high dividend stocks within the portfolio.
The best performing markets over the year were the Philippines, Indonesia and India. They benefi ted from a greater reliance on domestic
consumption for growth. It was no surprise, therefore, that export-led markets such as Taiwan, China and South Korea were some of the
worst performing markets during this year. By sector, information technology (IT) was by some distance the worst performer (the fund was
materially underweight). Not owning Tencent, for example, was a key contributor to performance. On the other hand, cyclical sectors such
as materials and industrials were the best performers.
The fund’s overweight position in energy and underweight position in the strongly performing industrials sector were the key detractors at a
sector level, but were more than off set by positive contributions from the strong performances of certain communication services holdings
and the consumer discretionary sector. SK Innovation in South Korea was a key detractor in the year, as energy names remained volatile.
By country, overweight positions in Singapore and Thailand were positives, as well as underweight positioning in Taiwan, which was the key
contributor to performance. Not owning any names in India was a major detractor for the fund, as was weaker stock selection in Australia,
where the fund’s underweight position in materials remained a negative. Not owning Fortescue Metals, for example, was the second largest
detractor at the stock level during the year.
The portfolio was a direct benefi ciary of the rotation into income stocks with its holdings in Singapore REITs Mapletree Commercial Trust
and Mapletree North Asia Commercial Trust, which both appeared in the top 10 contributors to performance. Infrastructure assets also
performed well given their resilient operating performance throughout various economic cycles and high sustainable yield; Macquarie Korea
Infrastructure Fund and Digital Telecommunications Infrastructure Fund were key winners over the year under review.
The fund reduced exposure to IT over the year with the disposals of Chinasoft, NetEase and Hon Hai. We also sold Yutong Bus, Huayu
Automotive and Baoshan Steel in China following some weak numbers and an uncertain outlook, and replaced these with more favourable
domestically focused names, including Kweichow Moutai, China Vanke and Jiangsu Expressway. We removed Australian contactor Lend
Lease from the fund following an unexpected provision in its engineering division. With the proceeds, we initiated a new position in Treasury
Wine Estates following some share price weakness to gain exposure to the improving demand for higher quality wine in China, and also
added a new position in Vietnam through the acquisition of the Vietnam Opportunities Fund.
We reduced our positions in refi ning by selling Star Petroleum and also removed Korean bank KB Financial from the fund over fears of a
slowing Korean economy and potentially higher levels of provisioning. Macau casino Sands China was also added on expectations of higher
Chinese tourism spending. Finally, the improvement in macroeconomic indicators in Indonesia prompted us to add Bank Negara Indonesia,
which is expected to show strong loan growth in the next few years. Other high income names in Australia, namely Dexus Property REIT,
Stockland REIT and Australia & New Zealand Banking, were added.
We remain cautiously optimistic on Asian markets based on attractive valuations and resilient growth prospects, especially compared
with the developed world. In the short term, however, markets will likely remain dictated by political factors and economic data (especially
from the US and China) though the recent rotation into income has been positive for the strategy. We would expect this to continue in
an environment of falling interest rates and elevated geopolitical risk. With dividend growth in Asia appearing robust, the region remains
attractive in the current environment by off ering a unique combination of income and capital growth potential.
Investment report for the year from 1 July 2018 to 30 June 2019
103
Asian Dividend Income Fund
Statement of Net Assets
As at 30 June 2019Notes USD
Assets
Investment in securities at market value 3 350,797,543 Cash at bank 12 11,715,726 Interest and dividends receivable 3 3,411,733 Subscriptions receivable 231,508 Receivable for investments sold 6,062,541 Unrealised gain on contracts for diff erence 3 -Unrealised gain on futures contracts 3 -Unrealised gain on forward foreign exchange contracts 3 22 Purchased option contracts at market value 3 -Swap contracts at market value 3 -Other assets -Management fee rebate -Total assets 372,219,073
Liabilities
Bank overdraft 12 10,986,967 Payable for investments purchased 2,281,891 Taxes and expenses payable 853,320 Redemptions payable 150,516 Unrealised loss on contracts for diff erence 3 -Unrealised loss on futures contracts 3 -Unrealised loss on forward foreign exchange contracts 3 1,375 Sold option contracts at market value 3 1,153,390 Swap contracts at market value 3 -Dividends payable to shareholders 3,487,518 Interest and dividends payable on CFD -Other liabilities -Total liabilities 18,914,977
Net assets at the end of the year 353,304,096
Statement of Operations
For the year from 1 July 2018 to 30 June 2019Notes USD
Income
Dividend income (net of withholding tax) 3 19,673,859 Bond interest income 3 -Income from collective investment schemes 3 -Derivative income 3 1,898,673 Interest received on contracts for diff erence 3 -Other income 3, 13 105,766 Total income 21,678,298
Expenses
Management fees 6, 14 2,731,210 Administration, registrar and transfer agent fees 6 151,397 Custodian fees 6 155,493 Shareholder servicing fees and distribution fees 6, 14 554,901 Depositary fees 6 19,686 Other expenses 6 155,273 Derivative expenses 3 1 Interest paid on contracts for diff erence 3 -Performance fees 6 210 Taxation ("taxe d'abonnement") 7 89,176 Total expenses 3,857,347
Net income from investments 17,820,951
Net realised gain/(loss)
Net realised loss on investment securities 3 (8,978,270) Net realised gain/loss on contracts for diff erence 3 -Net realised gain/loss on futures contracts 3 -Net realised gain/loss on swap contracts 3 -Net realised gain on options contracts 3 272,954 Net realised gain on forward foreign exchange contracts 3 53,642 Net realised loss on currency exchange (376,025)
Net realised loss on investments and derivatives (9,027,699)
Net change in unrealised appreciation/
depreciation
Change in net unrealised appreciation/depreciation on investments
3 12,003,225
Change in net unrealised appreciation/depreciation on contracts for diff erence
3 -
Change in net unrealised appreciation/depreciation on futures contracts
3 -
Change in net unrealised appreciation/depreciation on swap contracts
3 -
Change in net unrealised appreciation/depreciation on options contracts
3 (336,994)
Change in net unrealised appreciation/depreciation on forward foreign exchange contracts
3 (1,280)
Change in net unrealised appreciation/depreciation on currency exchange
(6,030)
Change in unrealised appreciation/depreciation on investments and derivatives
11,658,921
Net increase in assets as a result of operations 20,452,173
The accompanying notes form an integral part of these fi nancial statements.
104
Asian Dividend Income Fund
Statement of Changes in Net Assets
For the year from 1 July 2018 to 30 June 2019Notes USD Notes USD
Net assets at the beginning of the year 309,413,941 Proceeds from shares issued 88,817,053 Net income from investments 17,820,951 Payments for shares redeemed (56,442,612) Net realised loss on investments and derivatives (9,027,699) Net equalisation (paid)/received 10 397,407 Change in unrealised appreciation/depreciation on investments and derivatives
11,658,921 Dividends paid 11 (9,333,866)
Net assets at the end of the year 353,304,096
Share Transactions
For the year from 1 July 2018 to 30 June 2019A2
(EUR)
A2
(SGD)
A2
(USD)
A3
(EUR)
A3
(SGD)
A3
(USD)
Shares outstanding at the beginning of the year 152,309.84 39,689.40 706,299.02 468,026.47 180,519.66 4,281,938.73Shares issued during the year 6,733.19 2,261.67 327,966.50 198,223.37 11,542.55 1,193,493.04Shares redeemed during the year (17,266.16) (3,824.55) (465,366.81) (214,783.34) (22,306.11) (872,481.03)Shares outstanding at the end of the year 141,776.87 38,126.52 568,898.71 451,466.50 169,756.10 4,602,950.74
Equivalent to a net asset value per share of: 18.74 28.86 21.32 8.93 13.76 10.18
A3 HCNH
(CNH)
A4
(USD)
F3
(USD)
G2
(USD)
G3
(GBP)
H2
(EUR)
Shares outstanding at the beginning of the year 162.24 - 167,062.11 45,025.00 731,504.15 582,342.10Shares issued during the year 3.05 37,998.74 59,302.36 5,100.00 1,417,094.60 37,554.03Shares redeemed during the year - - (89,125.38) (35,900.00) (126,388.89) (154,788.85)Shares outstanding at the end of the year 165.29 37,998.74 137,239.08 14,225.00 2,022,209.86 465,107.28
Equivalent to a net asset value per share of: 110.01 9.97 10.57 12.68 12.15 14.94
H2
(USD)
H3
(EUR)
H3
(USD)
I2
(USD)
I3
(GBP)
Q3
(EUR)
Shares outstanding at the beginning of the year 243,557.52 3,602,955.68 2,009,189.48 6,695,473.34 168,747.52 276.94Shares issued during the year 15,393.28 917,288.17 249,340.24 1,226,659.20 500,232.63 5.19Shares redeemed during the year (115,047.00) (1,307,827.40) (313,924.86) (488,240.45) (24,839.02) -Shares outstanding at the end of the year 143,903.80 3,212,416.45 1,944,604.86 7,433,892.09 644,141.13 282.13
Equivalent to a net asset value per share of: 13.73 10.43 8.77 23.36 8.81 9.54
Q3
(GBP)
Q3
(USD)
X2
(USD)
Shares outstanding at the beginning of the year 153,613.14 43,690.61 29,326.12Shares issued during the year 157,360.18 - 624.22Shares redeemed during the year (15,302.43) (29,972.15) (9,762.14)Shares outstanding at the end of the year 295,670.89 13,718.46 20,188.20
Equivalent to a net asset value per share of: 12.18 9.91 19.85
TER is calculated in accordance with SFAMA (Swiss Funds and Asset Management Association).* The share class launched in the year and the rate is annualised.The amounts earned in relation to performance fees for the year are shown in note 6 to the fi nancial statements.The TER includes performance fees as at 30 June 2019.
106
Asian Dividend Income Fund
Performance history (unaudited)
Fund & Benchmark 1 year to 1 year to 1 year to 1 year to 1 year to
30 Jun 15 30 Jun 16 30 Jun 17 30 Jun 18 30 Jun 19
% % % % %
Asian Dividend Income Fund A2 (USD) 0.11 (10.35) 17.29 4.69 4.97 MSCI AC Asia Pacifi c ex Japan High Dividend Yield Index* (0.48) (10.17) 24.96 9.57 3.28
Performance quoted in the investment report relates to Class A2 (USD) shares.
* On 3 September 2018 the fund changed its benchmark from the MSCI AC Asia ex Japan Index to the MSCI AC Asia Pacifi c ex Japan High Dividend Yield Index.
Past performance is not a guide to future performance.
107
Asian Dividend Income Fund
Portfolio as at 30 June 2019 (continued)
Number
of Securities
Market
Value
USD
% of
Net
Assets
Hong Kong 6.80%
Communication Services 2.87%
6,377,000 HKT Trust & HKT 10,134,245 2.87
Consumer Discretionary 3.93%
5,920,800 Chow Tai Fook Jewellery 6,440,906 1.82
1,555,200 Sands China 7,433,431 2.11
13,874,337 3.93
Indonesia 4.83%
Communication Services 2.55%
30,702,900 Telekomunikasi Indonesia 9,008,212 2.55
Transferable securities and money market instruments admitted to an offi cial exchange listing and/or dealt on another regulated market, unless otherwise stated.
Equities 99.29%
Australia 15.89%
Consumer Staples 2.44%
821,236 Treasury Wine Estates 8,606,869 2.44
Financials 4.00%
322,034 Australia & New Zealand Banking 6,382,345 1.81
88,317 Macquarie REIT 7,759,601 2.19
14,141,946 4.00
Materials 2.05%
251,580 BHP 7,256,089 2.05
Real Estate 5.23%
736,799 Dexus Property REIT 6,728,305 1.91
2,065,447 Scentre 5,650,420 1.60
2,078,466 Stockland REIT 6,093,741 1.72
18,472,466 5.23
Utilities 2.17%
4,507,999 Spark Infrastructure 7,674,246 2.17
China 20.77%
Consumer Discretionary 2.21%
1,137,000 ANTA Sports Products 7,807,841 2.21
Consumer Staples 2.44%
60,251 Kweichow Moutai 8,622,140 2.44
Energy 2.71%
14,064,000 Sinopec 9,572,279 2.71
Financials 2.90%
11,883,000 China Construction Bank 10,233,439 2.90
^ Unlisted securities.* In the case of derivative instruments, Market Value refers to the net profi t or loss and is used
in the calculation of the Fund NAV.** Applicable for authorised funds per the SFC (Securities and Futures Commission) guidelines.Any diff erences in the percentage of Net Assets fi gures are the result of roundings.
Top ten changes in the securities portfolio for the year
from 1 July 2018 to 30 June 2019
Description of Securities Purchases Sales
USD USD
Australia
Australia & New Zealand Banking 13,271,942 -
Dexus Property REIT 7,528,788 -
Suncorp - 7,277,348
Treasury Wine Estates 9,208,157 -
Wesfarmers 7,633,729 7,609,821
China
Agricultural Bank of China 9,601,729 8,995,125
Bank of China 11,326,133 18,336,552
China Mobile - 7,360,789
Huayu Automotive Systems - 7,844,447
Industrial & Commercial Bank of China - 9,253,610
Kweichow Moutai 7,902,818 -
Postal Savings Bank 9,296,804 8,618,456
Indonesia
Bank Negara 7,860,077 -
Malaysia
Malayan Banking Berhad - 7,069,706
Singapore
Venture 7,410,910 -
South Korea
KB Financial - 7,569,327
Asian Dividend Income Fund
110
Asian Growth Fund
Investment Fund Managers
Andrew Gillan and Mervyn Koh
The fund fell 0.8% based on Class A2 US Dollar terms over the year under review, compared with the MSCI AC Asia Pacifi c ex Japan
Index which returned 0.8%.
Asian equity markets posted a very small positive return for the year as a whole but have returned close to 40% for the three years to the
end of June 2019. The fund marginally underperformed for the year. The trade dispute between the US and China dominated the headlines
throughout the 12 months under review and really dictated the direction of markets. This was evidenced by a sharp sell off in the last
quarter of 2018 followed by a healthy recovery early in 2019, only for expectations of a positive resolution to fade towards the end of the
year. Throughout this time, we have aimed to focus on company fundamentals and on the longer term growth prospects of our investments;
but clearly, the trade dispute has impacted consumer sentiment and corporate capital expenditure decisions, which have already had an
impact on both macroeconomic data and corporate earnings expectations. Both have trended lower through the year. On a positive note,
the shift in tone from the US Federal Reserve regarding interest rates is generally positive for Asian and emerging market assets, as the US
Dollar is less likely to strengthen in a fl at or falling interest rate environment.
China underperformed over the year, while India outperformed. China was most impacted by the threat of tariff s, while India was buoyed by
Prime Minister Narendra Modi’s re-election by a larger than anticipated margin. Our allocation decisions were therefore positive given our
underweight to China and overweight to India throughout the year, although this was very much driven by stock selection rather than any
macroeconomic view. Our underweight to Australia was the biggest detractor from an allocation perspective, as the market outperformed
over the year. The banking sector in Australia rebounded on expectations of less severe regulation, while the resources sector benefi ted
from fi rmer pricing, particularly in iron ore. By sector, our overweight to fi nancials was positive, as the sector outperformed. Stock selection
was also positive, driven particularly by our allocation to Indian private sector fi nancials and the life insurance sector in Hong Kong and
China. Our overweight to the information technology (IT) sector detracted, as this sector is clearly more vulnerable to trade issues; but
pleasingly, positive stock selection compensated, due largely to our exposure to the Indian IT services sector.
We reduced our exposure to the IT sector, although we have remained overweight. Key purchases in the second half of the year included
exposure to the Indonesian banking sector and Macau gaming, which we think off er attractive structural growth prospects at reasonable
prices. We exited our only position in Sri Lanka on a diffi cult economic and operational outlook and also sold out of our position in a Hong
Kong bank; the margin expansion failed to materialise as much as expected in the rising-rate environment. We continue to run a very
focused, active portfolio of just over 30 companies.
Given the strong fi rst half for Asian markets, we remain cautiously positioned in the short term given that macroeconomic data and
corporate earnings growth expectations are both deteriorating. However, we remain constructive on the longer term opportunities for Asian
equities. We believe that valuations are at a healthy discount to developed markets and that economic growth will remain among the
highest globally. There is no reason why we cannot return to a higher rate of earnings growth in the medium to longer term, particularly if a
resolution in the trade dispute is reached.
Investment report for the year from 1 July 2018 to 30 June 2019
111
Asian Growth Fund
Statement of Net Assets
As at 30 June 2019Notes USD
Assets
Investment in securities at market value 3 20,628,529 Cash at bank 12 1,209,587 Interest and dividends receivable 3 56,440 Subscriptions receivable -Receivable for investments sold -Unrealised gain on contracts for diff erence 3 -Unrealised gain on futures contracts 3 -Unrealised gain on forward foreign exchange contracts 3 -Purchased option contracts at market value 3 -Swap contracts at market value 3 -Other assets -Management fee rebate -Total assets 21,894,556
Liabilities
Bank overdraft 12 -Payable for investments purchased -Taxes and expenses payable 80,734 Redemptions payable 114,787 Unrealised loss on contracts for diff erence 3 -Unrealised loss on futures contracts 3 -Unrealised loss on forward foreign exchange contracts 3 -Sold option contracts at market value 3 -Swap contracts at market value 3 -Dividends payable to shareholders -Interest and dividends payable on CFD -Other liabilities 114,848 Total liabilities 310,369
Net assets at the end of the year 21,584,187
Statement of Operations
For the year from 1 July 2018 to 30 June 2019Notes USD
Income
Dividend income (net of withholding tax) 3 511,755 Bond interest income 3 -Income from collective investment schemes 3 -Derivative income 3 -Interest received on contracts for diff erence 3 -Other income 3, 13 14,034 Total income 525,789
Expenses
Management fees 6, 14 265,842 Administration, registrar and transfer agent fees 6 17,344 Custodian fees 6 29,196 Shareholder servicing fees and distribution fees 6, 14 112,170 Depositary fees 6 1,711 Other expenses 6 24,178 Derivative expenses 3 -Interest paid on contracts for diff erence 3 -Performance fees 6 -Taxation ("taxe d'abonnement") 7 10,936 Total expenses 461,377
Net income from investments 64,412
Net realised gain/(loss)
Net realised gain on investment securities 3 1,275,596 Net realised gain/loss on contracts for diff erence 3 -Net realised gain/loss on futures contracts 3 -Net realised gain/loss on swap contracts 3 -Net realised gain/loss on options contracts 3 -Net realised gain on forward foreign exchange contracts 3 1,844 Net realised loss on currency exchange (26,113)
Net realised gain on investments and derivatives 1,251,327
Net change in unrealised appreciation/
depreciation
Change in net unrealised appreciation/depreciation on investments
3 (1,636,849)
Change in net unrealised appreciation/depreciation on contracts for diff erence
3 -
Change in net unrealised appreciation/depreciation on futures contracts
3 -
Change in net unrealised appreciation/depreciation on swap contracts
3 -
Change in net unrealised appreciation/depreciation on options contracts
3 -
Change in net unrealised appreciation/depreciation on forward foreign exchange contracts
3 -
Change in net unrealised appreciation/depreciation on currency exchange
1,213
Change in unrealised appreciation/depreciation on investments and derivatives
(1,635,636)
Net decrease in assets as a result of operations (319,897)
The accompanying notes form an integral part of these fi nancial statements.
112
Statement of Changes in Net Assets
For the year from 1 July 2018 to 30 June 2019Notes USD Notes USD
Net assets at the beginning of the year 27,525,571 Proceeds from shares issued 2,514,585 Net income from investments 64,412 Payments for shares redeemed (8,123,224) Net realised gain on investments and derivatives 1,251,327 Net equalisation (paid)/received 10 (12,848) Change in unrealised appreciation/depreciation on investments and derivatives
(1,635,636) Dividend distributions 11 -
Net assets at the end of the year 21,584,187
Share Transactions
For the year from 1 July 2018 to 30 June 2019A2
(EUR)
A2
(SGD)
A2
(USD)
H2
(EUR)
H2
(USD)
X2
(EUR)
Shares outstanding at the beginning of the year 25,884.61 25.00 182,687.36 17.00 17.00 136.68Shares issued during the year 2,212.34 - 11,305.51 4,572.28 - -Shares redeemed during the year (9,174.10) - (45,240.22) (4,572.20) - (107.06)Shares outstanding at the end of the year 18,922.85 25.00 148,752.65 17.08 17.00 29.62
Equivalent to a net asset value per share of: 177.14 141.22 118.91 155.53 150.12 169.53
X2
(USD)
Shares outstanding at the beginning of the year 3,064.53Shares issued during the year 8.63Shares redeemed during the year (2,465.78)Shares outstanding at the end of the year 607.38
Equivalent to a net asset value per share of: 111.02
TER is calculated in accordance with SFAMA (Swiss Funds and Asset Management Association).There were no performance fees on the fund as at 30 June 2019.
Performance history (unaudited)
Fund & Benchmark 1 year to 1 year to 1 year to 1 year to 1 year to
30 Jun 15 30 Jun 16 30 Jun 17 30 Jun 18 30 Jun 19
% % % % %
Asian Growth Fund A2 (USD) (0.35) (6.99) 25.92 7.92 (0.75) MSCI AC Asia Pacifi c ex Japan Index* 4.14 ** (11.89) ** 24.70 9.57 0.81
Performance quoted in the investment report relates to Class A2 (USD) shares.* On 2 May 2017 the fund changed its benchmark from the MSCI AC Asia ex Japan Index to the MSCI AC Asia Pacifi c ex Japan Index.** Historic benchmark restated.
Past performance is not a guide to future performance.
1,855,700 Land & Houses (Alien Market) 668,639 3.10
Vietnam 1.28%
Consumer Staples 1.28%
52,236 Vietnam Dairy Products 275,469 1.28
Investment in securities (cost USD 16,708,525*) 20,628,529 95.57
Other net assets 955,658 4.43
Total net assets 21,584,187 100.00
* Applicable for authorised funds per the SFC (Securities and Futures Commission) guidelines.Any diff erences in the percentage of Net Assets fi gures are the result of roundings.
Portfolio as at 30 June 2019 (continued)
Number
of Securities
Market
Value
USD
% of
Net
Assets
Transferable securities and money market instruments admitted to an offi cial exchange listing and/or dealt on another regulated market, unless otherwise stated.
Equities 95.57%
Australia 2.85%
Consumer Staples 2.85%
58,697 Treasury Wine Estates 615,167 2.85
China 17.78%
Communication Services 5.19%
24,800 Tencent 1,119,474 5.19
Consumer Discretionary 6.35%
5,754 Alibaba 983,561 4.55
51,504 Midea 388,409 1.80
1,371,970 6.35
Consumer Staples 1.78%
21,726 Jiangsu Yanghe Brewery 'A' 384,133 1.78
Financials 3.09%
55,500 Ping An Insurance 667,007 3.09
Information Technology 1.37%
73,722 Hangzhou Hikvision Digital Technology 295,752 1.37
Hong Kong 11.84%
Consumer Discretionary 3.54%
160,500 Samsonite International 368,107 1.71
82,800 Sands China 395,761 1.83
763,868 3.54
Financials 5.38%
107,600 AIA 1,160,531 5.38
Industrials 2.92%
82,500 Techtronic Industries 630,184 2.92
India 20.26%
Consumer Staples 2.49%
135,676 ITC 537,584 2.49
Financials 12.65%
9,708 Bajaj & Investment 506,815 2.35
31,103 HDFC Bank 1,098,790 5.09
35,522 Housing Development Finance 1,127,521 5.21
2,733,126 12.65
Information Technology 5.12%
52,413 Infosys 554,961 2.57
17,069 Tata Consultancy Services 550,281 2.55
1,105,242 5.12
Indonesia 2.29%
Financials 2.29%
1,597,700 Bank Rakyat 493,644 2.29
Asian Growth Fund
115
Asian Growth Fund
Top ten changes in the securities portfolio for the year
The fund fell 1.2% based on class A2 Euro terms compared with the benchmark MSCI EMU Net Return EUR return of 2.0%.
Last year, we concentrated on explaining why we thought the market dynamics prevalent at the time (growth outperforming value) were
unsustainable. To summarise, we believed that cheap fi nance was causing a misallocation of capital, as investor’s embraced risk on the
expectation that this was the norm. These conditions have continued over the review year and go a long way towards explaining the fund’s
underperformance. Stocks matching the characteristics we look for have been out of favour – the fund has a price/earnings multiple lower
than the market, together with a return on equity (ROE) higher than the market. In isolation, the fund could be considered a value stock, and
value stocks have been getting cheaper, on a relative basis, for two years. This move is unusual, in both its duration and nature, because the
derating has happened as earnings growth for value stocks in aggregate outstripped that of growth stocks. During the last year, the value
index returned 1.30% and the growth index returned 5.55%.
Over the last 12 months, we saw good performance from the holdings in Amer Sports (which was taken over), Poste Italiane (business
recovery), MTU Aero Engines (which is enjoying the benefi ts of prior investment), Neste (an environmentally friendly oil company
producing recovered diesel) and RELX (which has a good recurring revenue line). On the other hand, not holding SAP, and the positions
in UPM-Kymmene (China induced weakness), Eutelsat communications (profi ts disappointed), Sanofi (US pricing pressure) and Faurecia
(weakness in end markets–the position was sold to consolidate the holdings in autos) all detracted from performance.
We closed the year with 49 positions, so one down on last year. Our range is between 40 and 50. When we think the market off ers
exceptional opportunities, we will narrow down the holdings towards our minimum (40). Trades over the year saw us exit Amadeus IT (on
valuation grounds), Deutsche Post (trading conditions), Koninklijke Ahold Delhaize (on competition concerns) and Safran the aerospace
and defence equipment manufacturer (valuation grounds again). Purchases included agricultural equipment maker CNH (given its potential
for corporate reorganisation), Schneider Electric (which looks well placed to benefi t from increasing electrifi cation), Publicis (which has the
potential for a return to growth) and Sodexo (which sold off but has substantial barriers to entry).
Longer term history shows that equity returns are driven by three things: 1) the price paid for the asset, with cheap being better than
expensive; 2) the progression of the returns over the holding period; and 3) the valuation aff orded by the market at the time of sale. While
we can’t do anything about the last point – we think that buying cheap assets (which are undervalued), with good earnings/cashfl ows and
the ability to reinvest at attractive returns (high relative ROE) means that, over the longer term, point three should take care of itself. Since
the fi rst and last points are largely a function of how investors view an individual company’s prospects at the time in question, if we can buy
good assets at depressed prices (for transitory/fi xable reasons) then the valuation multiple should expand over our holding period.
Looking to the future, we can add little to our closing statement of last year: we are happy that the fund’s investment process is the correct
one and, although current conditions are not pleasant, they are, in our opinion, sowing the seeds for future excess returns.
Investment report for the year from 1 July 2018 to 30 June 2019
117
Euroland Fund
Statement of Net Assets
As at 30 June 2019Notes EUR
Assets
Investment in securities at market value 3 1,253,848,459 Cash at bank 12 33,047,969 Interest and dividends receivable 3 2,577,324 Subscriptions receivable 7,441,914 Receivable for investments sold 3,319,249 Unrealised gain on contracts for diff erence 3 -Unrealised gain on futures contracts 3 -Unrealised gain on forward foreign exchange contracts 3 115,469 Purchased option contracts at market value 3 -Swap contracts at market value 3 -Other assets 2,371,049 Management fee rebate -Total assets 1,302,721,433
Liabilities
Bank overdraft 12 289,963 Payable for investments purchased 4,338,955 Taxes and expenses payable 3,724,478 Redemptions payable 10,676,129 Unrealised loss on contracts for diff erence 3 -Unrealised loss on futures contracts 3 -Unrealised loss on forward foreign exchange contracts 3 660,193 Sold option contracts at market value 3 -Swap contracts at market value 3 -Dividends payable to shareholders 493,018 Interest and dividends payable on CFD -Other liabilities -Total liabilities 20,182,736
Net assets at the end of the year 1,282,538,697
Statement of Operations
For the year from 1 July 2018 to 30 June 2019Notes EUR
Income
Dividend income (net of withholding tax) 3 38,172,087 Bond interest income 3 -Income from collective investment schemes 3 -Derivative income 3 -Interest received on contracts for diff erence 3 -Other income 3, 13 263,877 Total income 38,435,964
Expenses
Management fees 6, 14 15,880,056 Administration, registrar and transfer agent fees 6 893,672 Custodian fees 6 121,603 Shareholder servicing fees and distribution fees 6, 14 4,955,190 Depositary fees 6 105,235 Other expenses 6 1,037,465 Derivative expenses 3 15,576 Interest paid on contracts for diff erence 3 -Performance fees 6 8,800 Taxation ("taxe d'abonnement") 7 518,587 Total expenses 23,536,184
Net income from investments 14,899,780
Net realised gain/(loss)
Net realised loss on investment securities 3 (63,449,163) Net realised gain/loss on contracts for diff erence 3 -Net realised gain/loss on futures contracts 3 -Net realised gain/loss on swap contracts 3 -Net realised gain/loss on options contracts 3 -Net realised gain on forward foreign exchange contracts 3 4,498,354 Net realised gain on currency exchange 29,623
Net realised loss on investments and derivatives (58,921,186)
Net change in unrealised appreciation/
depreciation
Change in net unrealised appreciation/depreciation on investments
3 (1,547,186)
Change in net unrealised appreciation/depreciation on contracts for diff erence
3 -
Change in net unrealised appreciation/depreciation on futures contracts
3 -
Change in net unrealised appreciation/depreciation on swap contracts
3 -
Change in net unrealised appreciation/depreciation on options contracts
3 -
Change in net unrealised appreciation/depreciation on forward foreign exchange contracts
3 (291,271)
Change in net unrealised appreciation/depreciation on currency exchange
533
Change in unrealised appreciation/depreciation on investments and derivatives
(1,837,924)
Net decrease in assets as a result of operations (45,859,330)
The accompanying notes form an integral part of these fi nancial statements.
118
Euroland Fund
Statement of Changes in Net Assets
For the year from 1 July 2018 to 30 June 2019Notes EUR Notes EUR
Net assets at the beginning of the year 1,949,178,274 Proceeds from shares issued 755,271,274 Net income from investments 14,899,780 Payments for shares redeemed (1,375,526,691) Net realised loss on investments and derivatives (58,921,186) Net equalisation (paid)/received 10 (31,812) Change in unrealised appreciation/depreciation on investments and derivatives
(1,837,924) Dividend distributions 11 (493,018)
Net assets at the end of the year 1,282,538,697
Share Transactions
For the year from 1 July 2018 to 30 June 2019A1
(EUR)
A2
(EUR)
A2
(USD)
A2 HCHF
(CHF)
A2 HSGD
(SGD)
A2 HUSD
(USD)
Shares outstanding at the beginning of the year 431,442.19 21,616,903.15 603,311.51 398,412.60 77,434.19 5,444,524.98Shares issued during the year - 7,219,860.34 16,232.62 4,666.60 9,182.93 254,783.01Shares redeemed during the year (112,089.66) (14,906,241.03) (526,653.74) (235,212.56) (41,622.69) (2,774,625.80)Shares outstanding at the end of the year 319,352.53 13,930,522.46 92,890.39 167,866.64 44,994.44 2,924,682.19
Equivalent to a net asset value per share of: 10.27 47.90 9.78 10.31 12.04 13.31
C2
(EUR)
F2 HUSD
(USD)
G2
(EUR)
H1
(EUR)
H2
(EUR)
H2 HCHF
(CHF)
Shares outstanding at the beginning of the year 250.00 21,301.35 8,768,209.51 976,341.32 6,086,738.22 1,252,617.32Shares issued during the year - 249.00 18,215,076.64 1,216,737.80 3,389,501.75 21,423.25Shares redeemed during the year - (21,301.35) (5,407,357.88) (452,712.07) (5,294,908.12) (403,266.80)Shares outstanding at the end of the year 250.00 249.00 21,575,928.28 1,740,367.05 4,181,331.85 870,773.77
Equivalent to a net asset value per share of: 11.26 10.02 13.20 9.29 13.19 10.89
H2 HGBP
(GBP)
H2 HUSD
(USD)
I1
(EUR)
I2
(EUR)
I2
(USD)
I2 HGBP
(GBP)
Shares outstanding at the beginning of the year 197,272.00 843,948.52 1,750,999.71 36,289,661.86 297,550.04 18,109.33Shares issued during the year 17,478.48 318,403.87 - 9,121,636.00 65,842.64 3,587.00Shares redeemed during the year (50,061.26) (274,809.15) (831,875.78) (34,023,563.12) (324,478.01) (12,139.80)Shares outstanding at the end of the year 164,689.23 887,543.24 919,123.93 11,387,734.74 38,914.67 9,556.53
Equivalent to a net asset value per share of: 14.24 11.78 11.94 14.30 9.94 11.20
I2 HUSD
(USD)
X2
(EUR)
X2 HUSD
(USD)
Shares outstanding at the beginning of the year 1,327,592.27 770,235.25 302,096.49Shares issued during the year 75,939.80 30,118.35 10,638.30Shares redeemed during the year (987,971.27) (409,200.16) (75,040.05)Shares outstanding at the end of the year 415,560.81 391,153.44 237,694.74
Equivalent to a net asset value per share of: 12.26 44.85 11.26
TER is calculated in accordance with SFAMA (Swiss Funds and Asset Management Association).The amounts earned in relation to performance fees for the year are shown in note 6 to the fi nancial statements.The TER includes performance fees as at 30 June 2019.
120
Performance history (unaudited)
Fund & Benchmark 1 year to
30 Jun 15
1 year to
30 Jun 16
1 year to
30 Jun 17
1 year to
30 Jun 18
1 year to
30 Jun 19
% % % % %
Euroland Fund (EUR) A2 (EUR) 13.71 (8.52) 22.54 (1.22) (1.22) MSCI EMU Net Return EUR 11.45 (11.74) 24.82 3.30 2.04
Performance quoted in the investment report relates to Class A2 (EUR) shares.
Past performance is not a guide to future performance.
Euroland Fund
121
Portfolio as at 30 June 2019 (continued)
Number
of Securities
Market
Value
EUR
% of
Net
Assets
Germany 20.57%
Consumer Goods 4.69%
1,068,080 Porsche Automobil 60,132,904 4.69
Consumer Services 0.58%
501,974 Deutsche Lufthansa 7,468,118 0.58
Financials 3.95%
240,928 Allianz 50,600,903 3.95
Health Care 2.87%
445,076 Bayer 27,076,198 2.11
141,553 Fresenius Medical Care 9,747,340 0.76
36,823,538 2.87
Industrials 5.00%
361,935 HeidelbergCement 25,639,475 2.00
186,571 MTU Aero Engines 38,536,240 3.00
64,175,715 5.00
Telecommunications 2.26%
1,910,258 Deutsche Telekom 29,016,819 2.26
Utilities 1.22%
727,914 RWE 15,602,837 1.22
Italy 6.39%
Financials 3.19%
4,447,878 Poste Italiane 40,898,238 3.19
Technology 0.35%
75,347 Reply 4,473,728 0.35
Utilities 2.85%
3,204,703 Enel 19,707,322 1.54
3,812,612 Snam 16,823,150 1.31
36,530,472 2.85
Luxembourg 0.52%
Consumer Services 0.52%
147,846 RTL 6,639,764 0.52
Netherlands 13.11%
Basic Materials 0.70%
81,984 Koninklijke DSM 8,913,710 0.70
Consumer Services 3.26%
654,095 Wolters Kluwer 41,862,080 3.26
Financials 7.53%
841,755 ABN AMRO 15,833,412 1.23
976,555 Exor 59,950,711 4.68
2,041,453 ING 20,814,655 1.62
96,598,778 7.53
Euroland Fund
Portfolio as at 30 June 2019 (continued)
Number
of Securities
Market
Value
EUR
% of
Net
Assets
Transferable securities and money market instruments admitted to an offi cial exchange listing and/or dealt on another regulated market, unless otherwise stated.
Equities 97.76%
Finland 4.92%
Basic Materials 2.26%
1,263,487 UPM-Kymmene 28,959,122 2.26
Industrials 0.92%
538,068 Valmet 11,789,070 0.92
Oil & Gas 1.74%
745,885 Neste 22,376,550 1.74
France 37.46%
Basic Materials 1.18%
186,750 Arkema 15,152,895 1.18
Consumer Goods 7.00%
60,876 LVMH Moet Hennessy Louis Vuitton 22,563,689 1.76
* In the case of derivative instruments, Market Value refers to the net profi t or loss and is used in the calculation of the Fund NAV.
** Applicable for authorised funds per the SFC (Securities Financing Commission) guidelines.Any diff erences in the percentage of Net Assets fi gures are the result of roundings.
Top ten changes in the securities portfolio for the year
from 1 July 2018 to 30 June 2019
Description of Securities Purchases Sales
EUR EUR
Finland
UPM-Kymmene - 52,049,288
Valmet 36,775,434 -
France
Capgemini 48,452,632 62,802,569
Eiff age 41,889,362 -
Eutelsat Communications 59,967,888 -
Faurecia - 49,146,128
LVMH Moet Hennessy Louis Vuitton - 64,802,607
Michelin 43,793,584 -
Publicis 42,523,887 -
Safran - 62,402,931
Sanofi 60,526,904 -
Schneider Electric 45,978,028 -
Thales 45,526,893 -
Germany
BASF - 46,054,390
Merck - 47,198,505
Netherlands
Koninklijke Ahold Delhaize - 57,921,158
Wolters Kluwer 38,140,007 -
Spain
Aena - 56,801,024
Amadeus IT - 53,030,033
124
European Growth Fund
Investment Fund Managers
Simon Rowe and Marc Schartz
The fund fell 0.1% based on Class A2 Euro terms over the year under review, compared with the FTSE World Europe ex UK Total Return Index
which returned 6.7%.
Equities experienced something of a rollercoaster ride in the year to 30 June. In the fi rst half of the year under reveiw, there was a sharp sell-off
because of worries about a trade war between the US and China with the potential for knock-on eff ects on growth elsewhere. Investors were
also concerned about the potential impact of the US Federal Reserve (Fed) continuing to raise interest rates. In the second part of the year,
equities rallied strongly due to hopes of a settlement between the US and China (partly because US President Trump abandoned trade threats
to Mexico). Markets were also encouraged by a change in tone from the Fed, which became more cautious about the economic outlook and
indicated that any potential interest rate rises were off the table. Towards the end of the year under review, US interest rate cuts appeared more
likely and the European central bank also indicated a softer stance and the likelihood of further bond-buying or other form of monetary stimulus.
This resulted in a paradoxical situation of weakening economic indicators but rising equity markets. Much of the equity performance was driven
by bond markets, where US 10-year government bond yields fell, hitting 2% by the end of June. The German 10-year bund yield slipped to
-0.4% in early July, well below the previous low seen in 2016 (in the aftermath of the Brexit vote). The further strength of the bond market gave
added impetus to defensive equities, in particular consumer staples and other so called ‘bond proxies’.
A major part of the fund’s underperformance can be explained by our position in mid-caps. Historically, these stocks have driven signifi cant
outperformance by the fund. But in this period, especially in the second half of 2018, mid-caps were a handicap because they underperformed
the wider market. Moreover, in the fi rst half of 2019, they failed to recover this underperformance. Looking at the portfolio, there were strong
performances from a number of our defensive growth companies, such as RELX, Wolters Kluwer and SCOR. Amer Sports returned 45%,
as it succumbed to a Chinese bid. SCOR also gained nearly 30% on a bid approach. Tele2 ‘B’ gained 29% on its merger with Com Hem.
Other strong performers included new positions Ströer and Rheinmetall. IMCD continued its strong run, gaining 43%. Off setting these gains
were Rockwool International ‘B’, which fell back on reduced margin expectations. Plant engineer Andritz and sausage skin maker Viscofan
disappointed on trading, while UPM-Kymmene and DFDS fell back on concerns about the economic outlook (which we think is overdone). Our
position in Bayer also suff ered on US legal concerns, although we believe the shares overreacted to the likely legal costs.
In the second half of 2018, we reduced industrial and cyclical exposure by cutting holdings in Continental, Trelleborg ‘B’, Schneider Electric,
Atlas, Cargotec Tarkett, Nokian Tyres and CNH. We also sold a number of other holdings, such as Nilfi sk and Lenzing, where we were more
cautious than management about the outlook. A number of these companies produced profi t warnings or poor performance after disposal.
We replaced some of these holdings with more defensive positions, including diagnostics group DiaSorin and healthcare outsourcing group
UDG Healthcare. We also bought positions in Nestlé and Danone, whose performances appear to be improving due to greater portfolio
management. We bought a holding in Infi neon Technologies after the sell-off in May 2019; because if the auto market is weak in 2019, it
will benefi t from the trend towards electric cars. We bought into three initial public off erings: Knorr-Bremse, a global leader in train and truck
brakes (the company performed strongly after our purchase); SIG Combibloc, a swiss competitor to Tetra Pac; and Marel, a specialist in meat
processing equipment.
It is easy to be nervous about the outlook for the remainder of 2019. Second quarter earnings results are likely to show some volatility, with
a number of companies showing the impact of uncertainty and disruption caused by the threats of trade wars. Brexit lurks in the wings. That
said, expectations of European economic performance are low, so in a more cautious scenario, there may be fewer downside risks in Europe
than elsewhere.
Investment report for the year from 1 July 2018 to 30 June 2019
125
European Growth Fund
Statement of Net Assets
As at 30 June 2019Notes EUR
Assets
Investment in securities at market value 3 74,279,796 Cash at bank 12 1,030,645 Interest and dividends receivable 3 68,436 Subscriptions receivable -Receivable for investments sold 368,113 Unrealised gain on contracts for diff erence 3 -Unrealised gain on futures contracts 3 -Unrealised gain on forward foreign exchange contracts 3 2,586 Purchased option contracts at market value 3 -Swap contracts at market value 3 -Other assets 176,547 Management fee rebate -Total assets 75,926,123
Liabilities
Bank overdraft 12 -Payable for investments purchased 339,995 Taxes and expenses payable 275,417 Redemptions payable 956,756 Unrealised loss on contracts for diff erence 3 -Unrealised loss on futures contracts 3 -Unrealised loss on forward foreign exchange contracts 3 287,919 Sold option contracts at market value 3 -Swap contracts at market value 3 -Dividends payable to shareholders 311,520 Interest and dividends payable on CFD -Other liabilities -Total liabilities 2,171,607
Net assets at the end of the year 73,754,516
Statement of Operations
For the year from 1 July 2018 to 30 June 2019Notes EUR
Income
Dividend income (net of withholding tax) 3 1,857,594 Bond interest income 3 -Income from collective investment schemes 3 -Derivative income 3 -Interest received on contracts for diff erence 3 -Other income 3, 13 43,673 Total income 1,901,267
Expenses
Management fees 6, 14 1,264,885 Administration, registrar and transfer agent fees 6 60,178 Custodian fees 6 39,831 Shareholder servicing fees and distribution fees 6, 14 58,475 Depositary fees 6 5,271 Other expenses 6 62,009 Derivative expenses 3 10,473 Interest paid on contracts for diff erence 3 -Performance fees 6 -Taxation ("taxe d'abonnement") 7 36,419 Total expenses 1,537,541
Net income from investments 363,726
Net realised gain/(loss)
Net realised loss on investment securities 3 (85,370) Net realised gain/loss on contracts for diff erence 3 -Net realised gain/loss on futures contracts 3 -Net realised gain/loss on swap contracts 3 -Net realised gain/loss on options contracts 3 -Net realised gain on forward foreign exchange contracts 3 1,564,018 Net realised gain on currency exchange 14,880
Net realised gain on investments and derivatives 1,493,528
Net change in unrealised appreciation/
depreciation
Change in net unrealised appreciation/depreciation on investments
3 (1,008,988)
Change in net unrealised appreciation/depreciation on contracts for diff erence
3 -
Change in net unrealised appreciation/depreciation on futures contracts
3 -
Change in net unrealised appreciation/depreciation on swap contracts
3 -
Change in net unrealised appreciation/depreciation on options contracts
3 -
Change in net unrealised appreciation/depreciation on forward foreign exchange contracts
3 (230,201)
Change in net unrealised appreciation/depreciation on currency exchange
20,186
Change in unrealised appreciation/depreciation on investments and derivatives
(1,219,003)
Net increase in assets as a result of operations 638,251
The accompanying notes form an integral part of these fi nancial statements.
126
Statement of Changes in Net Assets
For the year from 1 July 2018 to 30 June 2019Notes EUR Notes EUR
Net assets at the beginning of the year 85,641,399 Proceeds from shares issued 4,245,319 Net income from investments 363,726 Payments for shares redeemed (16,447,957) Net realised gain on investments and derivatives 1,493,528 Net equalisation (paid)/received 10 (10,976) Change in unrealised appreciation/depreciation on investments and derivatives
(1,219,003) Dividend distributions 11 (311,520)
Net assets at the end of the year 73,754,516
Share Transactions
For the year from 1 July 2018 to 30 June 2019A2
(EUR)
H1
(EUR)
H2
(EUR)
I1
(EUR)
I2
(EUR)
R1
(EUR)
Shares outstanding at the beginning of the year 749,862.41 16,982.36 5,125.00 219,857.07 55,510.58 2,202,963.47Shares issued during the year 43,356.93 2.74 - - 3,182.42 89,250.92Shares redeemed during the year (289,022.59) (4,964.86) (5,000.00) - (23,465.47) (224,813.68)Shares outstanding at the end of the year 504,196.75 12,020.24 125.00 219,857.07 35,227.53 2,067,400.71
Equivalent to a net asset value per share of: 18.83 14.71 20.01 17.35 20.01 18.23
R1 HUSD
(USD)
X2
(EUR)
Shares outstanding at the beginning of the year 1,537,771.31 1,795.81Shares issued during the year 103,601.49 166.67Shares redeemed during the year (399,776.88) (1,795.81)Shares outstanding at the end of the year 1,241,595.92 166.67
Equivalent to a net asset value per share of: 20.06 16.03
TER is calculated in accordance with SFAMA (Swiss Funds and Asset Management Association).There were no performance fees on the fund as at 30 June 2019.
Performance history (unaudited)
Fund & Benchmark 1 year to
30 Jun 15
1 year to
30 Jun 16
1 year to
30 Jun 17
1 year to
30 Jun 18
1 year to
30 Jun 19
% % % % %
European Growth Fund A2 (EUR) 22.10 (5.73) 21.91 (0.11) (0.05) FTSE World Europe ex UK Total Return Index 14.29 (9.60) 22.14 1.79 6.67
Performance quoted in the investment report relates to Class A2 (EUR) shares.
Past performance is not a guide to future performance.
European Growth Fund
128
European Growth Fund
Portfolio as at 30 June 2019 (continued)
Number
of Securities
Market
Value
EUR
% of
Net
Assets
Transferable securities and money market instruments admitted to an offi cial exchange listing and/or dealt on another regulated market, unless otherwise stated.
* In the case of derivative instruments, Market Value refers to the net profi t or loss and is used in the calculation of the Fund NAV.
** Applicable for authorised funds per the SFC (Securities Financing Commission) guidelines.Any diff erences in the percentage of Net Assets fi gures are the result of roundings.
European Growth Fund
130
Top ten changes in the securities portfolio for the year
The fund fell 3.0% based on Class A2 US Dollar terms over the year under review, compared with the Tokyo SE First Section Index
(TOPIX) which fell 6.0%.
It was volatile 12 months. Earnings growth momentum slowed down in the July through September quarter as top line growth decelerated
as costs increased (a typical late cycle phenomenon). As the US continued to raise interest rates despite slowing macroeconomic data,
global stock markets discounted recession risks and sold off in the fourth quarter of 2018. However, the market re-gained positive
momentum at the start of the current calendar year as US monetary policy turned accommodative. In Japan, however, that sentiment lasted
little more than a quarter as the US became aggressive on China regarding trade negotiations. While the domestic Japanese economy
remained in good shape, weakness in the export sector suggested it was going through a soft patch, though the country avoided a
recession. Corporate earnings guidance was lowered.
The Japanese Yen appreciated by 2% during the year. The fund’s performance in the fi rst half of the year was volatile due to extreme market
movements in November 2018, where valuation lost explanatory power; the earlier gain was erased in that month. However, we continued
to maintain our investment style and stayed focused on cash generative companies that we believe can create shareholder value overtime.
We were able to pick up several high quality companies at discounts during the market turmoil. Our discipline on valuation and investment
style paid dividends when the market normalised in the second half of the year under review.
It was a good year for stock picking, and our idiosyncratic bets worked. The biggest contributor was Daiichi Sankyo, a pharmaceutical
company we purchased in September 2017, as the value of promising drugs in its pipeline was validated by a global tie-up with
AstraZeneca. Fujifi lm, another long-term investment of the fund, was the second biggest contributor. The management team seems to be
focusing more on asset effi ciency and taking aggressive actions on business restructuring, which we like. SoftBank is another long-term
holding (since 2016) and was the third largest contributor. The stock was rerated (it underwent a positive reassessment by the market) for
its successful transformation to an investment company. Its chief executive offi cer announced a large buyback, as the stock price was at
deep discount to net asset value.
The biggest detractor was Ryohin Keikaku, as the company failed to manage costs while topline growth continued. TDK, an electronic
components company, also had a negative impact, as the market considered its business with Chinese smartphone manufacturers to be at
risk.
We introduced several new stocks to the portfolio. Nomura Research Institute is a systems integrator and consulting fi rm that delivers a
high free cash fl ow return on investment. We liked the business and became attracted by its valuation when it sold off —the market disliked
its high exposure to the securities industry, where the business environment is tough. Otsuka is another highly cash-generative business
that provides information technology-related services to small and medium enterprises in Japan. We were able to pick up shares when they
dropped in expectation of a short-term earnings slowdown. On the sales side, we successfully sold several fi nancial names, such as Orix
and T&D. We also gave up Japan Tobacco, as stock did not react to catalysts.
There continues to be numerous macroeconomic risks, such as an intensifying trade war and the possibility of a rapid appreciation of the
Yen. However, we believe much of this has already been priced in, as the index now trades at 13x forward earnings, and yields sit at around
2.5%. While the market is discounting a recession risk, we believe that earnings-per-share for Topix-listed companies will continue to grow
in 2019, as well as in 2020. In our view, owning Japanese stocks is one of the least expensive ways to benefi t from a pick-up in global
growth.
It is worth mentioning that there was ¥5.9 trillion worth of share buyback announcements in the fi rst half of the year, which was more than
doubled from the same period last year. It is encouraging that corporate management teams are considering share prices to be extremely
attractive and are taking action.
In summary, we highlight three reasons to be positive on Japan: First of all, valuations appear attractive, and the outlook is improving.
Secondly, the political environment appears stable. And while we can only focus on the economy, the fi nal point is that the Rugby World
Cup and the Tokyo Olympics/Paralympics in 2020 are coming to Japan; this will not only create extra demand but could also trigger a
revaluation, as all eyes will be on the country. We cannot highlight enough that the risk-reward profi le seems very attractive. We have
strong confi dence in the stocks that we own and will continue to focus on stock picking, which will be a key determinant of the fund’s
performance.
Investment report for the year from 1 July 2018 to 30 June 2019
132
Japan Opportunities Fund
Statement of Net Assets
As at 30 June 2019Notes JPY
Assets
Investment in securities at market value 3 3,683,340,495 Cash at bank 12 100,033,500 Interest and dividends receivable 3 3,458,621 Subscriptions receivable 6,526,838 Receivable for investments sold -Unrealised gain on contracts for diff erence 3 -Unrealised gain on futures contracts 3 -Unrealised gain on forward foreign exchange contracts 3 225 Purchased option contracts at market value 3 -Swap contracts at market value 3 -Other assets -Management fee rebate -Total assets 3,793,359,679
Liabilities
Bank overdraft 12 1,181,022 Payable for investments purchased -Taxes and expenses payable 13,313,734 Redemptions payable 10,568,405 Unrealised loss on contracts for diff erence 3 -Unrealised loss on futures contracts 3 -Unrealised loss on forward foreign exchange contracts 3 83,924 Sold option contracts at market value 3 -Swap contracts at market value 3 -Dividends payable to shareholders -Interest and dividends payable on CFD -Other liabilities -Total liabilities 25,147,085
Net assets at the end of the year 3,768,212,594
Statement of Operations
For the year from 1 July 2018 to 30 June 2019Notes JPY
Income
Dividend income (net of withholding tax) 3 67,539,623 Bond interest income 3 -Income from collective investment schemes 3 -Derivative income 3 -Interest received on contracts for diff erence 3 -Other income 3, 13 921,810 Total income 68,461,433
Expenses
Management fees 6, 14 44,061,141 Administration, registrar and transfer agent fees 6 2,712,040 Custodian fees 6 1,610,139 Shareholder servicing fees and distribution fees 6, 14 18,273,159 Depositary fees 6 229,036 Other expenses 6 2,216,680 Derivative expenses 3 1,406 Interest paid on contracts for diff erence 3 -Performance fees 6 40,603 Taxation ("taxe d'abonnement") 7 1,755,899 Total expenses 70,900,103
Net expense from investments (2,438,670)
Net realised gain/(loss)
Net realised gain on investment securities 3 82,900,949 Net realised gain/loss on contracts for diff erence 3 -Net realised gain/loss on futures contracts 3 -Net realised gain/loss on swap contracts 3 -Net realised gain/loss on options contracts 3 -Net realised loss on forward foreign exchange contracts 3 (61,530) Net realised loss on currency exchange (1,946,422)
Net realised gain on investments and derivatives 80,892,997
Net change in unrealised appreciation/
depreciation
Change in net unrealised appreciation/depreciation on investments
3 (253,058,738)
Change in net unrealised appreciation/depreciation on contracts for diff erence
3 -
Change in net unrealised appreciation/depreciation on futures contracts
3 -
Change in net unrealised appreciation/depreciation on swap contracts
3 -
Change in net unrealised appreciation/depreciation on options contracts
3 -
Change in net unrealised appreciation/depreciation on forward foreign exchange contracts
3 (142,243)
Change in net unrealised appreciation/depreciation on currency exchange
18,497
Change in unrealised appreciation/depreciation on investments and derivatives
(253,182,484)
Net decrease in assets as a result of operations (174,728,157)
The accompanying notes form an integral part of these fi nancial statements.
133
Japan Opportunities Fund
Statement of Changes in Net Assets
For the year from 1 July 2018 to 30 June 2019Notes JPY Notes JPY
Net assets at the beginning of the year 4,869,369,805 Proceeds from shares issued 1,313,921,490 Net expense from investments (2,438,670) Payments for shares redeemed (2,239,918,845) Net realised gain on investments and derivatives 80,892,997 Net equalisation (paid)/received 10 (431,699) Change in unrealised appreciation/depreciation on investments and derivatives
(253,182,484) Dividend distributions 11 -
Net assets at the end of the year 3,768,212,594
Share Transactions
For the year from 1 July 2018 to 30 June 2019A2
(USD)
H2
(USD)
I2
(USD)
I2 HUSD
(USD)
X2
(USD)
Shares outstanding at the beginning of the year 2,371,335.67 10,921.39 124,362.74 11,451.67 69,864.59Shares issued during the year 724,630.90 186.64 5,807.69 - 2,841.14Shares redeemed during the year (1,085,277.30) (680.19) (81,089.56) (5,654.00) (20,972.63)Shares outstanding at the end of the year 2,010,689.27 10,427.84 49,080.87 5,797.67 51,733.10
Equivalent to a net asset value per share of: 16.44 14.53 18.50 18.26 15.14
TER is calculated in accordance with SFAMA (Swiss Funds and Asset Management Association).The amounts earned in relation to performance fees for the year are shown in note 6 to the fi nancial statements.The TER includes performance fees as at 30 June 2019.
Performance history (unaudited)
Fund & Benchmark 1 year to
30 Jun 15
1 year to
30 Jun 16
1 year to
30 Jun 17
1 year to
30 Jun 18
1 year to
30 Jun 19
% % % % %
Japan Opportunities Fund* A2 (USD) 14.29 (13.61) 31.03 3.99 (3.01) Tokyo SE First Section Index (TOPIX)** 9.24*** (7.23)*** 20.32*** 10.89 (6.00)
Performance quoted in the investment report relates to Class A2 (USD) shares.* On 1 April 2015 the fund changed its name from Japanese Equity Fund to Japan Opportunities Fund.** On 1 April 2015 the fund changed its benchmark from MSCI Japan Index to Tokyo SE First Section Index (TOPIX).*** Historic benchmark restated.
Past performance is not a guide to future performance.
135
Japan Opportunities Fund
Portfolio as at 30 June 2019 (continued)
Number
of Securities
Market
Value
JPY
% of
Net
Assets
Transferable securities and money market instruments admitted to an offi cial exchange listing and/or dealt on another regulated market, unless otherwise stated.
Equities 97.75%
Japan 97.75%
Communication Services 13.96%
18,000 Dentsu 67,680,000 1.80
3,200 Nintendo 126,336,000 3.35
42,600 SoftBank 219,837,300 5.83
355,600 Yahoo! Japan 112,369,600 2.98
526,222,900 13.96
Consumer Discretionary 21.91%
14,700 Denso 66,583,650 1.77
21,000 Koito Manufacturing 120,645,000 3.20
3,700 Nitori 52,817,500 1.40
22,400 Pan Pacifi c International 153,216,000 4.07
* In the case of derivative instruments, Market Value refers to the net profi t or loss and is used in the calculation of the Fund NAV.
** Applicable for authorised funds per the SFC (Securities and Futures Commission) guidelines.Any diff erences in the percentage of Net Assets fi gures are the result of roundings.
136
Japan Opportunities Fund
Top ten changes in the securities portfolio for the year
from 1 July 2018 to 30 June 2019
Description of Securities Purchases Sales
JPY JPY
Japan
Asahi 132,003,852 -
Daiichi Sankyo - 148,203,887
Dentsu - 128,237,316
Fanuc - 107,395,927
Fujifi lm - 107,687,921
Japan Tobacco - 208,747,863
KAO 132,818,107 -
KDDI - 127,700,677
Koito Manufacturing 71,086,656 -
Nintendo 153,575,080 -
Nomura Research Institute 116,545,238 -
NTT - 127,621,323
Otsuka 94,740,552 -
Ryohin Keikaku - 126,172,395
Shin-Etsu Chemical 113,176,719 -
TDK - 131,840,401
Toshiba 72,817,196 -
Toyota Motor 118,586,749 -
Trend Micro - 169,139,956
ZOZO 79,934,751 -
137
Pan European Dividend Income Fund
Investment Fund Manager
Nick Sheridan
The fund returned 0.2% based on Class A3 Euro terms over the year under review, compared with the MSCI Europe Net Return EUR
return of 4.5%.
Last year, we concentrated on explaining why we thought that the market dynamics prevalent at the time (growth outperforming value)
were unsustainable; we believed that cheap fi nance was causing a misallocation of capital, as investors embraced risk on the expectation
that this cheap fi nance was the norm. These conditions have continued over the year under review and go a long way to explain the fund’s
underperformance. Stocks with the characteristics we look for have been out of favour – income investing is a subset of value, and value
stocks have been getting less expensive on a relative basis over the last two years. We feel that this move is unusual in both its duration
and nature because the derating has happened as earnings growth for value stocks in aggregate has outstripped that of growth stocks.
Over the last year, the value index returned 0.07% and the growth index returned 8.93%.
Over the last year, we saw positive performance from the holdings in Iberdrola (results and increasing exposure to renewables), HomeServe
(its US business beating forecasts and continued growth in European mature markets), Rio Tinto (strong iron ore prices), Warehouses
De Pauw (new fi ve-year growth plan) and Allianz (results/solvency position and potential for dividend growth). On the negative side, the
holdings in Aareal Bank (sector weakness/UK exposure, Brexit fears), Ence (China’s economic slowdown), UPM-Kymmene (China’s
economic slowdown), BNP Paribas (sector weakness/low rates squeezing income) and Anima (sector weakness) all performed poorly.
We closed the year with 46 positions, slightly down on last year, with our range being between 40–50. When we think the market off ers
exceptional opportunities, we will narrow the holdings down towards our minimum (40) and vice versa.
We exited positions in M6 Metropole Television (switched into majority owner RTL), Deutsche Post (trade conditions), Ahold (competition
concerns) and Sampo (valuation). Purchases included Schneider Electric (looks well placed to benefi t from increasing electrifi cation) and
Randstad (which we feel has an excellent record of return, masked by fears of economic slowdown).
We believe that longer term history shows that equity returns are driven by three things: 1) the price paid for the asset – all things being
equal, inexpensive is better than expensive; 2) the progression of returns over the holding period; and 3) the valuation aff orded by the
market at the time of sale. While we can’t do anything to infl uence the latter point, we feel that by buying undervalued assets , with the
ability to reinvest at attractive returns (high relative return on equity), over the longer term point three should take care of itself. Since points
one and two are largely a function of how investors view an individual company’s prospects at the time in question, we feel that if we can
buy assets at depressed prices (for transitory/fi xable reasons), then the valuation multiple should expand over our holding period.
Looking ahead, we can add little to our closing statement of last year, we are happy that the fund’s investment process is the correct one
and as such, while not pleasant, current conditions are, in our opinion, sowing the seeds for future excess returns.
Investment report for the year from 1 July 2018 to 30 June 2019
138
Pan European Dividend Income Fund
Statement of Net Assets
As at 30 June 2019Notes EUR
Assets
Investment in securities at market value 3 4,719,449 Cash at bank 12 156,640 Interest and dividends receivable 3 16,994 Subscriptions receivable -Receivable for investments sold 1,223 Unrealised gain on contracts for diff erence 3 -Unrealised gain on futures contracts 3 -Unrealised gain on forward foreign exchange contracts 3 -Purchased option contracts at market value 3 -Swap contracts at market value 3 -Other assets 3,130 Management fee rebate -Total assets 4,897,436
Liabilities
Bank overdraft 12 -Payable for investments purchased -Taxes and expenses payable 12,422 Redemptions payable 3 Unrealised loss on contracts for diff erence 3 -Unrealised loss on futures contracts 3 -Unrealised loss on forward foreign exchange contracts 3 68 Sold option contracts at market value 3 -Swap contracts at market value 3 -Dividends payable to shareholders 216,242 Interest and dividends payable on CFD -Other liabilities -Total liabilities 228,735
Net assets at the end of the year 4,668,701
Statement of Operations
For the year from 1 July 2018 to 30 June 2019Notes EUR
Income
Dividend income (net of withholding tax) 3 217,386 Bond interest income 3 -Income from collective investment schemes 3 -Derivative income 3 1 Interest received on contracts for diff erence 3 -Other income 3, 13 24 Total income 217,411
Expenses
Management fees 6, 14 40,528 Administration, registrar and transfer agent fees 6 1,105 Custodian fees 6 4,892 Shareholder servicing fees and distribution fees 6, 14 76 Depositary fees 6 1,514 Other expenses 6 (1,643) Derivative expenses 3 -Interest paid on contracts for diff erence 3 -Performance fees 6 1 Taxation ("taxe d'abonnement") 7 476 Total expenses 46,949
Net income from investments 170,462
Net realised gain/(loss)
Net realised loss on investment securities 3 (70,177) Net realised gain/loss on contracts for diff erence 3 -Net realised gain/loss on futures contracts 3 -Net realised gain/loss on swap contracts 3 -Net realised gain/loss on options contracts 3 -Net realised gain on forward foreign exchange contracts 3 318 Net realised loss on currency exchange (618)
Net realised loss on investments and derivatives (70,477)
Net change in unrealised appreciation/
depreciation
Change in net unrealised appreciation/depreciation on investments
3 (55,980)
Change in net unrealised appreciation/depreciation on contracts for diff erence
3 -
Change in net unrealised appreciation/depreciation on futures contracts
3 -
Change in net unrealised appreciation/depreciation on swap contracts
3 -
Change in net unrealised appreciation/depreciation on options contracts
3 -
Change in net unrealised appreciation/depreciation on forward foreign exchange contracts
3 (57)
Change in net unrealised appreciation/depreciation on currency exchange
404
Change in unrealised appreciation/depreciation on investments and derivatives
(55,633)
Net increase in assets as a result of operations 44,352
The accompanying notes form an integral part of these fi nancial statements.
139
Pan European Dividend Income Fund
Statement of Changes in Net Assets
For the year from 1 July 2018 to 30 June 2019Notes EUR Notes EUR
Net assets at the beginning of the year 4,841,045 Proceeds from shares issued 12,956 Net income from investments 170,462 Payments for shares redeemed (13,246) Net realised loss on investments and derivatives (70,477) Net equalisation (paid)/received 10 (164) Change in unrealised appreciation/depreciation on investments and derivatives
(55,633) Dividend distributions 11 (216,242)
Net assets at the end of the year 4,668,701
Share Transactions
For the year from 1 July 2018 to 30 June 2019A2
(EUR)
A2 HUSD
(USD)
A3
(EUR)
E2
(EUR)
E2 HUSD
(USD)
E3
(EUR)
Shares outstanding at the beginning of the year 308.14 265.00 253.40 250.00 265.00 250.00Shares issued during the year 1,320.74 - - - - -Shares redeemed during the year (1,320.74) - - - - -Shares outstanding at the end of the year 308.14 265.00 253.40 250.00 265.00 250.00
Equivalent to a net asset value per share of: 10.41 11.14 9.17 10.90 11.61 9.43
H2
(EUR)
H3
(EUR)
IU3
(EUR)
Shares outstanding at the beginning of the year 250.00 250.00 498,500.00Shares issued during the year - - -Shares redeemed during the year - - -Shares outstanding at the end of the year 250.00 250.00 498,500.00
Equivalent to a net asset value per share of: 10.14 9.37 9.32
TER is calculated in accordance with SFAMA (Swiss Funds and Asset Management Association).The amounts earned in relation to performance fees for the year are shown in note 6 to the fi nancial statements.The TER includes performance fees as at 30 June 2019.
Performance history (unaudited)
Fund & Benchmark Since launch to 1 year to 1 year to 1 year to
30 Jun 16 30 Jun 17 30 Jun 18 30 Jun 19
% % % %
Pan European Dividend Income Fund* A3 (EUR) (13.20) 17.42 1.99 0.18 MSCI Europe Net Return EUR (10.97) 17.96 2.85 4.46
Performance quoted in the investment report relates to Class A3 (EUR) shares.* On 23 November 2015, Pan European Dividend Income Fund was launched.
Past performance is not a guide to future performance.
141
Pan European Dividend Income Fund
Portfolio as at 30 June 2019 (continued)
Number
of Securities
Market
Value
EUR
% of
Net
Assets
Transferable securities and money market instruments admitted to an offi cial exchange listing and/or dealt on another regulated market, unless otherwise stated.
Investment in securities and derivatives 4,719,381 101.09
Other net liabilities (50,680) (1.09)
Total net assets 4,668,701 100.00
* In the case of derivative instruments, Market Value refers to the net profi t or loss and is used in the calculation of the Fund NAV.
Any diff erences in the percentage of Net Assets fi gures are the result of roundings.
Top ten changes in the securities portfolio for the year
from 1 July 2018 to 30 June 2019
Description of Securities Purchases Sales
EUR EUR
Denmark
Vestas Wind Systems - 55,673
Finland
Kone - 109,659
Sampo - 70,353
UPM-Kymmene 24,124
France
Eutelsat Communications 114,467 -
M6 Metropole Television - 132,841
Publicis 40,264 39,695
Schneider Electric 151,124 -
Germany
Deutsche Post - 142,875
Porsche Automobil 150,127 -
Siltronic 47,679 -
Luxembourg
RTL 99,910 -
Netherlands
BE Semiconductor Industries 14,522 -
Randstad 48,764 -
Signify 26,270 -
Spain
Ence 89,516 46,833
United Kingdom
SSE - 56,647
WPP - 26,724
143
Pan European Equity Fund
Investment Fund Manager
James Ross
The fund returned 0.6% based on Class A2 Euro terms over the year under review, compared with the FTSE World Europe Index
which returned 4.8%. SAP, Roche and RELX were among the strongest contributors to fund performance over the year. SAP have been
demonstrating predictable and fast-paced revenue growth for a while (they are growing at double digit rates), but margin progress has been
more subdued. However, during the second half of the year, the company revealed long term margin targets that implied an improvement
in long term profi tability far ahead of market expectations. This was accompanied by an announcement by activist investor Elliott, saying
that they had taken a stake in the company and supported the long term margin targets. Roche, a position that we initiated at the start
of the year, has demonstrated revenue resilience in the face of pressure from biosimilars in some key therapeutic areas. They have also
demonstrated strong cost control and continued attractive cash generation. The shares have rerated (undergone a reassessment by the
market) materially over the year. RELX has ably demonstrated the predictable nature of its business model over the year. There have been
some question marks regarding pricing and retention rates in its journals business, but the overall operational delivery remains very strong;
we continue to see the valuation as being reasonable for the medium term growth on off er and consider it to have a resilient high-ROIC
business model.
Ryanair, British American Tobacco and UniCredit were among the biggest detractors from fund performance. Ryanair is suff ering from a
currently very tough industry environment where high supply growth is meeting with sluggish demand growth; this is resulting in pressure
on average fares across Europe. In the long run, we see the current environment as a positive, as it is likely to force faster than expected
industry consolidation and should benefi t the lowest-cost operator. British American Tobacco has suff ered from concerns over increasing
regulatory pressure. We see the transition within the industry from conventional cigarettes to reduced risk products as being a long term
positive for the company, but feel that is not being refl ected in the current valuation. UniCredit has performed very well operationally but has
seen its share price impacted by a tough economic and political environment in Italy.
We initiated positions in DCC and SIG Combibloc. DCC is a business that has managed to generate sustainably high returns going back
at least as far as the early 1990s. At its core, DCC is an exceptionally well-run distribution business with exposure to various end markets:
heating fuel, petrol stations, healthcare products and electrical goods, for example. It manages to generate high returns from a combination
of low margins with very limited invested capital (negative net working capital and low fi xed capital needs). Management have a very strong
track record of deploying capital at high incremental returns, whether through organic or inorganic investments. During the month, DCC
‘over-raised’ to fund a US acquisition; the resulting dilution sent the shares materially lower, which provided us the opportunity to invest in
this high quality franchise.
We also participated in the initial public off ering of Swiss Tetra Pak peer SIG Combibloc. Again, this is a company with a history of high
returns on capital. The business model involves the placing of aseptic packaging machines within consumer goods companies. These
customers then sign multi-year supply agreements for the aseptic packaging sleeves. The industry is reasonably consolidated and barriers
to entry are high; we believe that SIG Combibloc should be able to continue to deploy capital at high rates of return. In addition, the lack of
economic sensitivity in the end market is something that appeals to us at this stage in the cycle.
We also initiated a new position in Subsea 7. Subsea 7 is a Norwegian oil services business with a heavy exposure to SURF (Subsea
Umbilicals, Risers and Flowlines) installation activity. This is an area that has seen a long period of depressed activity levels due mostly
to the weak oil price. However, over recent months, we have started to see a pick-up in the order environment, due partly to the fi rmer oil
price, but also because of the huge defl ation we have seen in installation and construction costs in recent years; these two factors are
making off shore oil projects increasingly economically viable. To put some numbers around the investment opportunity, the company are
currently generating revenues of around $4bn per annum and consensus estimates for 2020 assume a similar level of delivery. The current
annualised order intake is running at over $5bn and appears to be accelerating. With orders tending to lag revenues by around two years,
there is a large disconnect between consensus revenue expectations for 2020 and the potential revenues suggested by the current order
environment (>$5bn). In addition, we can see a margin recovery as activity levels improve. Thus, by 2020, the company could be generating
substantially higher earnings and returns than currently expected. If our estimates are correct, you can comfortably model over 50% equity
upside over this time period.
Finally, I will touch on our new position in Vivendi. Our investment thesis is dominated by our perception of the long term opportunity within
Vivendi’s Universal Music Group (UMG). The global music industry has experienced a substantial decline in revenues since the turn of the
century, led by the decline of physical sales. However, in the last few years, the industry has returned to growth, led by music streaming. It is
our view that the consolidated content owners (Sony, UMG, Warner) are in a much better position to extract value from continued increases
in streaming penetration than the distributors of content (Spotify, Apple Music, etc). Partly for these reasons, we model substantial potential
equity upside on a medium term view. Interestingly, Vivendi is looking to sell a portion of UMG to one or several strategic investor(s) during
the next year; this could potentially be a catalyst for the wider market to reappraise the implied valuation of the music business.
We have had a tough year, but performance has picked up over the last six months. We are confi dent that, by focusing on a strict and
heavily research-focused process, we can continue to drive an improvement in performance over the medium term.
Please note that with eff ect from 28 February 2019, Jamie Ross has taken over sole management from Tim Stevenson.
Investment report for the year from 1 July 2018 to 30 June 2019
144
Pan European Equity Fund
Statement of Net Assets
As at 30 June 2019 Notes EUR
Assets
Investment in securities at market value 3 560,151,086 Cash at bank 12 2,347,041 Interest and dividends receivable 3 452,882 Subscriptions receivable 307,018 Receivable for investments sold 5,618,589 Unrealised gain on contracts for diff erence 3 -Unrealised gain on futures contracts 3 -Unrealised gain on forward foreign exchange contracts 3 22,515 Purchased option contracts at market value 3 -Swap contracts at market value 3 -Other assets 3,101,062 Management fee rebate -Total assets 572,000,193
Liabilities
Bank overdraft 12 118,078 Payable for investments purchased -Taxes and expenses payable 2,392,032 Redemptions payable 6,240,658 Unrealised loss on contracts for diff erence 3 -Unrealised loss on futures contracts 3 -Unrealised loss on forward foreign exchange contracts 3 520,924 Sold option contracts at market value 3 -Swap contracts at market value 3 -Dividends payable to shareholders 1,283,019 Interest and dividends payable on CFD -Other liabilities -Total liabilities 10,554,711
Net assets at the end of the year 561,445,482
Statement of Operations
For the year from 1 July 2018 to 30 June 2019Notes EUR
Income
Dividend income (net of withholding tax) 3 24,378,745 Bond interest income 3 -Income from collective investment schemes 3 -Derivative income 3 -Interest received on contracts for diff erence 3 -Other income 3, 13 78,043 Total income 24,456,788
Expenses
Management fees 6, 14 10,106,079 Administration, registrar and transfer agent fees 6 610,666 Custodian fees 6 97,447 Shareholder servicing fees and distribution fees 6, 14 3,112,403 Depositary fees 6 79,678 Other expenses 6 564,723 Derivative expenses 3 14,880 Interest paid on contracts for diff erence 3 -Performance fees 6 -Taxation ("taxe d'abonnement") 7 324,544 Total expenses 14,910,420
Net income from investments 9,546,368
Net realised gain/(loss)
Net realised gain on investment securities 3 83,735,418 Net realised gain/loss on contracts for diff erence 3 -Net realised gain/loss on futures contracts 3 -Net realised gain/loss on swap contracts 3 -Net realised gain/loss on options contracts 3 -Net realised gain on forward foreign exchange contracts 3 3,375,233 Net realised gain on currency exchange 109,469
Net realised gain on investments and derivatives 87,220,120
Net change in unrealised appreciation/
depreciation
Change in net unrealised appreciation/depreciation on investments
3 (130,477,567)
Change in net unrealised appreciation/depreciation on contracts for diff erence
3 -
Change in net unrealised appreciation/depreciation on futures contracts
3 -
Change in net unrealised appreciation/depreciation on swap contracts
3 -
Change in net unrealised appreciation/depreciation on options contracts
3 -
Change in net unrealised appreciation/depreciation on forward foreign exchange contracts
3 (335,316)
Change in net unrealised appreciation/depreciation on currency exchange
(5,412)
Change in unrealised appreciation/depreciation on investments and derivatives
(130,818,295)
Net decrease in assets as a result of operations (34,051,807)
The accompanying notes form an integral part of these fi nancial statements.
145
Pan European Equity Fund
Statement of Changes in Net Assets
For the year from 1 July 2018 to 30 June 2019Notes EUR Notes EUR
Net assets at the beginning of the year 1,631,427,016 Proceeds from shares issued 337,287,434 Net income from investments 9,546,368 Payments for shares redeemed (1,369,833,967) Net realised gain on investments and derivatives 87,220,120 Net equalisation (paid)/received 10 (2,100,175) Change in unrealised appreciation/depreciation on investments and derivatives
Shares outstanding at the beginning of the year 4,270,105.67 17,808,548.66 125.00 3,321,681.92 5,549,352.01 108,037.81Shares issued during the year 233,462.88 1,172,501.33 - 3,835.39 46,793.11 464.00Shares redeemed during the year (3,187,208.85) (9,913,005.16) - (2,244,376.63) (3,436,967.90) (53,422.00)Shares outstanding at the end of the year 1,316,359.70 9,068,044.83 125.00 1,081,140.67 2,159,177.22 55,079.81
Equivalent to a net asset value per share of: 25.19 28.39 22.79 16.09 14.10 20.78
F2
(USD)
F2 HUSD
(USD)
G2
(EUR)
H1
(EUR)
H2
(EUR)
H2
(USD)
Shares outstanding at the beginning of the year 326,260.71 83,661.12 28,435,030.68 3,555,203.26 2,133,201.14 39,899.06Shares issued during the year - - 2,027,092.59 1,833,332.96 368,090.34 -Shares redeemed during the year - (83,427.91) (29,638,176.00) (1,176,479.65) (1,371,324.42) (10,172.14)Shares outstanding at the end of the year 326,260.71 233.21 823,947.27 4,212,056.57 1,129,967.06 29,726.92
Equivalent to a net asset value per share of: 11.64 12.09 13.75 12.15 14.94 15.98
H2 HUSD
(USD)
I2 (EUR) I2
(USD)
I2 HUSD
(USD)
M2
(EUR)
X2
(EUR)
Shares outstanding at the beginning of the year 8,675.93 10,404,301.58 3,757,118.57 882,753.28 2,263,435.03 138,703.45Shares issued during the year 23,317.79 645,666.55 205,135.03 102,233.97 - 20,659.91Shares redeemed during the year (28,436.98) (9,201,386.25) (3,694,958.07) (315,377.54) (2,263,435.03) (26,853.08)Shares outstanding at the end of the year 3,556.74 1,848,581.88 267,295.53 669,609.71 - 132,510.28
Equivalent to a net asset value per share of: 15.45 32.11 14.72 14.36 - 26.40
X2 HUSD
(USD)
Z2
(EUR)
Shares outstanding at the beginning of the year 428,502.06 -Shares issued during the year - 14,689,013.26Shares redeemed during the year (142,328.48) (10,348,036.95)Shares outstanding at the end of the year 286,173.58 4,340,976.31
Equivalent to a net asset value per share of: 12.81 15.33
TER is calculated in accordance with SFAMA (Swiss Funds and Asset Management Association).* The share class launched in the year and the rate is annualised.There were no performance fees on the fund as at 30 June 2019.
Performance history (unaudited)
Fund & Benchmark 1 year to 1 year to 1 year to 1 year to 1 year to
30 Jun 15 30 Jun 16 30 Jun 17 30 Jun 18 30 Jun 19
% % % % %
Pan European Equity Fund A2 (EUR) 21.55 (12.22) 14.96 (1.26) 0.60 FTSE World Europe Index 14.14 (10.25) 18.69 3.43 4.80
Performance quoted in the investment report relates to Class A2 (EUR) shares.
Past performance is not a guide to future performance.
147
Pan European Equity Fund
Portfolio as at 30 June 2019 (continued)
Number
of Securities
Market
Value
EUR
% of
Net
Assets
Transferable securities and money market instruments admitted to an offi cial exchange listing and/or dealt on another regulated market, unless otherwise stated.
* In the case of derivative instruments, Market Value refers to the net profi t or loss and is used in the calculation of the Fund NAV.
** Applicable for authorised funds per the SFC (Securities and Futures Commission) guidelines.Any diff erences in the percentage of Net Asset fi gures are the result of roundings.
149
Pan European Equity Fund
Top ten changes in the securities portfolio for the year
from 1 July 2018 to 30 June 2019
Description of Securities Purchases Sales
EUR EUR
Denmark
Novo Nordisk 'B' - 44,806,066
France
Renault 20,036,812 -
Total - 49,258,479
Vivendi 22,552,310 -
Germany
Bayer 26,574,063 -
Deutsche Post - 51,298,309
Fresenius Medical Care - 50,169,781
Netherlands
ASML - 46,083,142
ING 23,128,371 52,913,482
Royal Dutch Shell 'A' 33,195,826 -
Spain
Amadeus IT - 46,241,677
Switzerland
Novartis - 61,689,011
Roche 22,244,812 55,735,955
United Kingdom
BP 18,031,884 48,629,928
DCC 35,553,989 -
Lloyds Banking 35,252,203 -
Subsea 7 20,176,503 -
150
US Growth Fund
Investment Fund Managers
W. Scott Priebe and Derek J. Pawlak
The fund returned 12.8% based on Class A2 US Dollar terms over the year under review compared to the benchmark Russell 3000 Growth
Index return of 10.2%, an outperformance of 2.6%.
The relative outperformance can be attributed to strong stock selection in the technology and consumer discretionary sectors, which
contributed 2.8% and 2.6%, respectively. The greatest contributors at the individual stock level were Paycom Software and Danaher. In
February, Paycom Software reported particularly strong fundamentals, with fourth quarter revenue growth of 32% (the highest growth rate in
the space) and healthy margins, despite only incremental investments in research & development and sales. In May, the company followed
this up with another impressive quarter of strong revenue growth and healthy margins. Danaher was a strong fundamental performer during
the year; in February 2019, the company announced an agreement to acquire the biopharma business of GE Life Sciences. The deal was
very well received by investors and the valuation paid by Danaher looks reasonable.
The fi rst half of 2019 was one of the strongest starts for equities in over two decades. The S&P 500 Index returned 18.5%, a very strong
start to the year after what was one of the worst fourth quarters in history. US growth equities were even stronger, with large cap growth
(Russell 1000 Growth Index) and small cap growth (Russell 2000 Growth Index) up 21.5% and 20.4%, respectively. The strength in
equity markets was the result of more dovish central banks, a possible trade resolution with China and a relatively strong US economy
(though slowing versus last year). The second half of 2018 was a good period for high quality equities (those rated B+ or better), which
outperformed low quality equities (those rated B or worse) by 9.2%. Those strong, high quality trends haven’t continued into 2019, as low
quality stocks have slightly outperformed; however, over the trailing fi nancial year, the trend is solidly in favour of high quality. Overall, index
level factor attribution has favoured high quality, but during the fi rst half of 2019 the data was more mixed and didn’t show much of a bias
either way. While high beta stocks signifi cantly outperformed low beta, which would normally indicate a bias towards low quality, high
growth rate companies and companies with a high price to earnings ratio outperformed, indicating a bias towards higher quality.
On the negative side, allocations to fi nancial services and consumer staples detracted 1.7% and 0.9%, respectively. The greatest detractors
at the strategy level were Bank of the Ozarks and Abiomed. Shares of Bank of the Ozarks fell during the second half of 2018, much
of which was attributable to the company’s commercial loan exposure; quarterly results reported in July met investor expectations, but
commentary around slower loan growth and limited net interest margin expansion has investors frustrated. The company is known for
having very conservative underwriting, and management has stated that it’s not interested in chasing deals. October’s reporting fi gures
disappointed, with weak earnings and net charge-off s of US $46m (more than the company has had in the last fi ve and a half years).
We therefore sold out of the position in late 2018. Shares of Abiomed were down meaningfully in March 2019, around investor concerns
regarding potential competition from Abbott and other emerging players, as well as concerns regarding reimbursement pricing. Given what
we believe is a strong competitive position in a nascent market, we added to our position on this weakness.
New positions were initiated in National Instruments (a leader in test & measurement tools and software for engineers and scientists),
Microsoft (a leading software company specialising in operating systems, server application and consumer software applications), Grand
Canyon Education (a leader in for-profi t education, with a fast growing physical campus in Arizona and strong online business) and Trex
(the leader in composite decking products, an area where there is a secular shift away from wood decking towards composite materials).
We sold our positions in Red Hat (which was acquired by IBM), Kontoor Brands (a slower growth spin-off from an existing position in
VF Corp), and Allegiant Travel, Bank of the Ozarks, Walgreens Boots Alliance, Watsco and Cantel Medical (all of which were sold for
fundamental reasons).
A shift in expectations for rate cuts later this year drove markets during the early part of the summer, and now changes the outlook for
economic growth going forward. Economic data started to weaken earlier this year, something the US Federal Reserve (Fed) hadn’t
acknowledged until recently, so expectations for a rate cut were 50/50; now, with the Fed signalling its intention to cut rates in the second
half of the year, investors are reacting to an environment of lower rates. The question remains how much the Fed feels it needs to cut and
how quickly. While fundamental economic data continues to be mixed, recent employment data was strong and the temporary tariff truce
was a positive for markets. We believe that tariff s on China, and to an extent the issues with Mexico, pose the greatest threat to economic
stability for the foreseeable future. Were the dispute with China to be resolved, and investors and business owners had more confi dence,
we feel that the economy would be on stronger footing.
Investment report for the year from 1 July 2018 to 30 June 2019
151
US Growth Fund
Statement of Net Assets
As at 30 June 2019Notes USD
Assets
Investment in securities at market value 3 25,568,233 Cash at bank 12 960,800 Interest and dividends receivable 3 6,054 Subscriptions receivable 7,707 Receivable for investments sold -Unrealised gain on contracts for diff erence 3 -Unrealised gain on futures contracts 3 -Unrealised gain on forward foreign exchange contracts 3 -Purchased option contracts at market value 3 -Swap contracts at market value 3 -Other assets -Management fee rebate -Total assets 26,542,794
Liabilities
Bank overdraft 12 -Payable for investments purchased -Taxes and expenses payable 94,480 Redemptions payable 36,089 Unrealised loss on contracts for diff erence 3 -Unrealised loss on futures contracts 3 -Unrealised loss on forward foreign exchange contracts 3 -Sold option contracts at market value 3 -Swap contracts at market value 3 -Dividends payable to shareholders -Interest and dividends payable on CFD -Other liabilities -Total liabilities 130,569
Net assets at the end of the year 26,412,225
Statement of Operations
For the year from 1 July 2018 to 30 June 2019Notes USD
Income
Dividend income (net of withholding tax) 3 131,895 Bond interest income 3 -Income from collective investment schemes 3 -Derivative income 3 -Interest received on contracts for diff erence 3 -Other income 3, 13 18,007 Total income 149,902
Expenses
Management fees 6, 14 291,986 Administration, registrar and transfer agent fees 6 18,143 Custodian fees 6 8,640 Shareholder servicing fees and distribution fees 6, 14 118,146 Depositary fees 6 1,708 Other expenses 6 15,862 Derivative expenses 3 -Interest paid on contracts for diff erence 3 -Performance fees 6 10 Taxation ("taxe d'abonnement") 7 11,883 Total expenses 466,378
Net expense from investments (316,476)
Net realised gain/(loss)
Net realised gain on investment securities 3 1,408,832 Net realised gain/loss on contracts for diff erence 3 -Net realised gain/loss on futures contracts 3 -Net realised gain/loss on swap contracts 3 -Net realised gain/loss on options contracts 3 -Net realised gain/loss on forward foreign exchange contracts 3 -Net realised gain on currency exchange 578
Net realised gain on investments and derivatives 1,409,410
Net change in unrealised appreciation/
depreciation
Change in net unrealised appreciation/depreciation on investments
3 1,895,267
Change in net unrealised appreciation/depreciation on contracts for diff erence
3 -
Change in net unrealised appreciation/depreciation on futures contracts
3 -
Change in net unrealised appreciation/depreciation on swap contracts
3 -
Change in net unrealised appreciation/depreciation on options contracts
3 -
Change in net unrealised appreciation/depreciation on forward foreign exchange contracts
3 -
Change in net unrealised appreciation/depreciation on currency exchange
-
Change in unrealised appreciation/depreciation on investments and derivatives
1,895,267
Net increase in assets as a result of operations 2,988,201
The accompanying notes form an integral part of these fi nancial statements.
152
US Growth Fund
Statement of Changes in Net Assets
For the year from 1 July 2018 to 30 June 2019Notes USD Notes USD
Net assets at the beginning of the year 23,702,895 Proceeds from shares issued 7,755,200 Net expense from investments (316,476) Payments for shares redeemed (8,034,071) Net realised gain on investments and derivatives 1,409,410 Net equalisation (paid)/received 10 -Change in unrealised appreciation/depreciation on investments and derivatives
1,895,267 Dividend distributions 11 -
Net assets at the end of the year 26,412,225
Share Transactions
For the year from 1 July 2018 to 30 June 2019A2
(USD)
H2
(USD)
I2
(USD)
X2
(USD)
Shares outstanding at the beginning of the year 783,567.85 125.00 102,631.60 16,641.67Shares issued during the year 269,372.05 - 2,136.52 17,574.06Shares redeemed during the year (194,346.40) - (83,460.60) (13,938.05)Shares outstanding at the end of the year 858,593.50 125.00 21,307.52 20,277.68
Equivalent to a net asset value per share of: 29.30 25.02 32.64 27.27
TER is calculated in accordance with SFAMA (Swiss Funds and Asset Management Association).The amounts earned in relation to performance fees for the year are shown in note 6 to the fi nancial statements.The TER includes performance fees as at 30 June 2019.
Performance history (unaudited)
Fund & Benchmark 1 year to 1 year to 1 year to 1 year to 1 year to
30 Jun 15 30 Jun 16 30 Jun 17 30 Jun 18 30 Jun 19
% % % % %
US Growth Fund* A2 (USD) 6.63 0.71 10.39 18.09 12.78 Russell 3000 Growth Index** 8.19 1.52 20.20 22.00 10.20
Performance quoted in the investment report relates to Class A2 (USD) shares.* On 1 April 2015, the fund changed its name from American Equity Fund to US Growth Fund.** On 1 April 2015, the fund changed its benchmark from S&P 500 to Russell 3000 Growth Index.
Past performance is not a guide to future performance.
154
US Growth Fund
Portfolio as at 30 June 2019 (continued)
Number
of Securities
Market
Value
USD
% of
Net
Assets
Transferable securities and money market instruments admitted to an offi cial exchange listing and/or dealt on another regulated market, unless otherwise stated.
Equities 96.80%
United States 96.80%
Communication Services 8.10%
6,867 Activision Blizzard 324,431 1.23
839 Alphabet 'A' 902,697 3.42
6,570 Walt Disney 911,982 3.45
2,139,110 8.10
Consumer Discretionary 16.21%
5,454 Bright Horizons Family Solutions 815,564 3.09
4,071 Grand Canyon Education 483,391 1.83
6,176 Lowe's 617,631 2.34
16,468 TJX 871,650 3.31
2,105 ULTA Beauty 727,467 2.75
8,787 VF 764,557 2.89
4,280,260 16.21
Consumer Staples 2.88%
2,857 Costco Wholesale 760,405 2.88
Financials 3.03%
9,646 Raymond James Financial 800,666 3.03
Health Care 15.66%
2,629 Abiomed 667,963 2.53
4,240 Bio-techne 876,344 3.32
6,928 Danaher 980,001 3.70
3,902 Edwards Lifesciences 721,070 2.73
3,072 Thermo Fisher Scientifi c 892,063 3.38
4,137,441 15.66
Industrials 12.75%
1,859 CoStar 1,011,817 3.83
7,666 Fortive 618,876 2.34
4,409 IDEX 750,081 2.84
2,842 Snap-on 467,466 1.77
7,261 Trex 519,234 1.97
3,367,474 12.75
Information Technology 35.02%
3,426 Adobe 1,001,745 3.79
8,394 Amphenol 'A' 800,620 3.03
9,985 Fiserv 911,181 3.45
3,564 Intuit 920,546 3.49
8,464 Microchip Technology 739,373 2.80
6,095 Microsoft 813,713 3.08
9,371 National Instruments 390,396 1.48
4,885 Paycom Software 1,085,691 4.11
5,100 Salesforce.com 765,485 2.90
3,364 Tyler Technologies 718,012 2.72
6,452 Visa 1,103,646 4.17
9,250,408 35.02
Portfolio as at 30 June 2019 (continued)
Number
of Securities
Market
Value
USD
% of
Net
Assets
Materials 3.15%
4,317 Ecolab 832,469 3.15
Investment in securities 25,568,233 96.80
Other net assets 843,992 3.20
Total Net assets 26,412,225 100.00
Any diff erences in the percentage of Net Assets fi gures are the result of roundings.
155
US Growth Fund
Top ten changes in the securities portfolio for the year
from 1 July 2018 to 30 June 2019
Description of Securities Purchases Sales
USD USD
United States
Abiomed 449,536 -
Adobe - 286,290
Allegiant Travel - 296,012
Alphabet 'A' 182,226 -
Amphenol 'A' 169,187 -
Bank of the Ozarks - 365,691
Cantel Medical - 480,006
Costco Wholesale - 155,801
Fiserv - 226,507
Grand Canyon Education 480,833 -
Microsoft 726,743 -
National Instruments 454,012 -
Red Hat - 1,052,921
Salesforce.com - 226,478
Trex 491,461 -
Tyler Technologies 187,401 -
Walgreens Boots Alliance 259,085 518,839
Walt Disney 231,120 -
Watsco - 591,436
156
Asia-Pacifi c Property Equities Fund
Investment Fund Managers
Tim Gibson and Xin Yan Low
The fund returned 12.5% based on Class A2 US Dollar terms over the year under review, compared with the FTSE EPRA Nareit Pure Asia
total return net dividend Index (Capital constrained) which generated 13.5%.
The fi rst half of the year under review was weak, particularly in the fourth quarter of 2018, as rising trade tensions and indications of slowing
global growth weighed on market sentiments. However, since the start of the new year, equity markets have made strong gains supported
by a more dovish tilt from global central banks. Bond markets also rallied with a sharp compression in yields. Asian property equities (+13%)
were up strongly over the year, outperforming the general market. In particular, the chase for yields benefi ted real estate investment trusts
(REITs) (+21%), which signifi cantly outperformed developers (+5%) across the region.
Singapore (+21%) led the region, as a more measured supply outlook supported rent rises across the offi ce, retail and industrial segments.
REITs benefi ted from fi rm fundamentals and outperformed on the back of falling yields, while developers lagged; they were dragged
down by negative sentiment concerning the residential market, which was hit by a new set of cooling measures at the start of the year.
Australian REITs (+17%) benefi ted from a sharp fall in 10-year bond yields to new all time lows. The Reserve Bank of Australia cut rates for
the fi rst time in three years towards the end of the year and signalled more easing. However, within the sector we saw a wide dispersion
in performance, as retail REITs continued to underperform amid rising headwinds. Hong Kong (+13%) was weighed down by negative
sentiment over trade war tensions in the fi rst half of the year, but was supported by a turnaround in the residential market which started
to see transaction volumes and prices recover at the start of 2019. Meanwhile, in Japan, REITs (+13%) performed well, in line with other
REITs in the region. However, Japanese developers (-5%) were signifi cant laggards despite positive surprises from several developers who
announced policies to improve corporate governance as well as shareholder returns. This included buyback programmes and the removal
of poison pills as well as increased payout ratios towards the end of the year.
Our performance in the fi rst half of the year was weighed down by our holdings in Tateru, which was caught in a scandal in which bank
employees falsifi ed customer data on loan applications. Hotel owner Shangri-La Asia also detracted, as it was aff ected by macroeconomic
uncertainty as trade tensions intensifi ed. We have since exited both positions. Performance picked up signifi cantly towards the latter half
of the year as we raised our overweight position in REITs, which benefi ted from the chase for yield. Our sector tilts in Australia, with an
overweight position in Goodman and Mirvac and underweight in positions in retail landlords, added signifi cant value over the year. An
overweight in Hong Kong necessity retail landlord Link REIT and an off -benchmark position in Philippines developer Ayala Land also added
to performance.
At the beginning of the year, we exited our position in Australian retirement living operator Aveo and rotated into Mirvac and Goodman on
better fundamentals and valuations. We also exited our position in Kerry Properties, Wharf Holdings, and Hang Lung Properties, and added
to CK Asset, Shangri-La Asia and Hongkong Land on better expected total returns. In September, we exited Tateru following the company’s
document falsifi cation scandal and rotated into Activia Properties and Nippon Prologis REIT instead. We exited our position in Australian
data centre operator NextDC in October following a good run, and rotated into Japanese REITs MCUBS MidCity Investment and Nippon
Prologis REIT on better relative returns. At the end of 2018, we saw markets sell off sharply and took the opportunity to add Singapore
developer City Developments, as we believe the stock represents deep value despite softening residential sales momentum in Singapore
and exited later post a strong rebound. We also initiated a new position in hotel owner and operator Millennium & Copthorne, but took
profi ts at the end of the year following signifi cant gains from a privatisation bid by major shareholder City Developments. With the Hong
Kong luxury retail recovery running its course and fundamentals of retail in Australia continuing to deteriorate, we sold out of our holdings
in Wharf REIC and Scentre. Within our REIT holdings, we switched out of Activia Properties into Nomura Real Estate Master Fund and
rotated from Ascendas REIT into Mapletree Logistics Trust on the back of better fundamentals and relative returns. We tilted our portfolio
weighting towards REITs, as we expected them to outperform developers in the chase for yield. We switched out our position in Hong Kong
Land and added Mapletree North Asia Commercial Trust. We also sold out of our holdings in Japanese developer Hulic and railway and
hotel owner Seibu to add to our holdings in Japanese REITs. Given deteriorating fundamentals in the hotel sector, we exited our position in
Shangri-La Asia. The strong share price performance from REITs across the region prompted a signifi cant pickup in equity raisings to fund
growth and we took the opportunity to add to some REITs in the portfolio.
Global central banks have set a dovish tone since the start of the year and expectations of rate cuts have risen signifi cantly. While bond
yields have fallen sharply, there is little reason to see the direction of travel change given stagnating growth, rising trade tensions and lower
infl ation forecasts. The defensive nature of property equities stands out during periods of heightened volatility, and we expect investors to
continue to seek exposure in property equities that are backed by real assets with an attractive and growing income stream. We believe
supply and demand remains well balanced in our region across most asset classes. Fundamentals remain strong for the ‘right’ sectors, but
the gap between these faster growing companies, such as those in logistics, and the rest should only continue to widen. We prefer to stay
well away from the retail sector, as we believe the perception of value is an illusion based on backward looking valuations and deteriorating
fundamentals not yet fully appreciated. We continue to seek out companies that we feel are capable of growing income and dividends and
those best placed to benefi t from technological advances, which are changing consumer behaviour and altering the needs and uses for
real estate. We will continue to play to our strengths, reducing risks and focusing on bottom-up stock selection to drive returns through a
concentrated, high conviction portfolio.
Investment report for the year from 1 July 2018 to 30 June 2019
157
Asia-Pacifi c Property Equities Fund
Statement of Net Assets
As at 30 June 2019Notes USD
Assets
Investment in securities at market value 3 72,568,248 Cash at bank 12 553,964 Interest and dividends receivable 3 481,005 Subscriptions receivable 5,637,551 Receivable for investments sold 137,505 Unrealised gain on contracts for diff erence 3 -Unrealised gain on futures contracts 3 -Unrealised gain on forward foreign exchange contracts 3 331 Purchased option contracts at market value 3 -Swap contracts at market value 3 -Other assets -Management fee rebate -Total assets 79,378,604
Liabilities
Bank overdraft 12 -Payable for investments purchased 315,001 Taxes and expenses payable 289,798 Redemptions payable 83,914 Unrealised loss on contracts for diff erence 3 -Unrealised loss on futures contracts 3 -Unrealised loss on forward foreign exchange contracts 3 177 Sold option contracts at market value 3 -Swap contracts at market value 3 -Dividends payable to shareholders 709,766 Interest and dividends payable on CFD -Other liabilities -Total liabilities 1,398,656
Net assets at the end of the year 77,979,948
Statement of Operations
For the year from 1 July 2018 to 30 June 2019Notes USD
Income
Dividend income (net of withholding tax) 3 2,315,480 Bond interest income 3 -Income from collective investment schemes 3 -Derivative income 3 -Interest received on contracts for diff erence 3 -Other income 3, 13 48,163 Total income 2,363,643
Expenses
Management fees 6, 14 836,932 Administration, registrar and transfer agent fees 6 48,337 Custodian fees 6 34,536 Shareholder servicing fees and distribution fees 6, 14 280,464 Depositary fees 6 5,076 Other expenses 6 37,046 Derivative expenses 3 -Interest paid on contracts for diff erence 3 -Performance fees 6 -Taxation ("taxe d'abonnement") 7 28,672 Total expenses 1,271,063
Net income from investments 1,092,580
Net realised gain/(loss)
Net realised gain on investment securities 3 365,054 Net realised gain/loss on contracts for diff erence 3 -Net realised gain/loss on futures contracts 3 -Net realised gain/loss on swap contracts 3 -Net realised gain/loss on options contracts 3 -Net realised loss on forward foreign exchange contracts 3 (67,208) Net realised gain on currency exchange 71,062
Net realised gain on investments and derivatives 368,908
Net change in unrealised appreciation/
depreciation
Change in net unrealised appreciation/depreciation on investments
3 6,453,708
Change in net unrealised appreciation/depreciation on contracts for diff erence
3 -
Change in net unrealised appreciation/depreciation on futures contracts
3 -
Change in net unrealised appreciation/depreciation on swap contracts
3 -
Change in net unrealised appreciation/depreciation on options contracts
3 -
Change in net unrealised appreciation/depreciation on forward foreign exchange contracts
3 154
Change in net unrealised appreciation/depreciation on currency exchange
3,899
Change in unrealised appreciation/depreciation on investments and derivatives
6,457,761
Net increase in assets as a result of operations 7,919,249
The accompanying notes form an integral part of these fi nancial statements.
158
Asia-Pacifi c Property Equities Fund
Statement of Changes in Net Assets
For the year from 1 July 2018 to 30 June 2019Notes USD Notes USD
Net assets at the beginning of the year 85,995,770 Proceeds from shares issued 16,496,382 Net income from investments 1,092,580 Payments for shares redeemed (31,610,138) Net realised gain on investments and derivatives 368,908 Net equalisation (paid)/received 10 (111,549) Change in unrealised appreciation/depreciation on investments and derivatives
6,457,761 Dividend distributions 11 (709,766)
Net assets at the end of the year 77,979,948
Share Transactions
For the year from 1 July 2018 to 30 June 2019A2
(EUR)
A2
(USD)
A3
(SGD)
A3
(USD)
H2
(EUR)
H2
(USD)
Shares outstanding at the beginning of the year 874,604.27 1,441,217.20 127.00 1,720,515.21 167.00 119,368.54Shares issued during the year 17,325.55 162,316.86 - 119,418.39 - 1,095.34Shares redeemed during the year (857,632.03) (406,442.66) - (346,832.98) - (50,401.14)Shares outstanding at the end of the year 34,297.79 1,197,091.40 127.00 1,493,100.62 167.00 70,062.74
Equivalent to a net asset value per share of: 17.35 19.75 23.37 16.08 17.87 12.28
H3
(USD)
I2
(EUR)
I2
(USD)
X2
(USD)
Shares outstanding at the beginning of the year 22,631.08 1,468.42 922,761.33 19,971.50Shares issued during the year 1.60 415,000.00 146,084.55 8,281.38Shares redeemed during the year (4,021.60) - (227,379.55) (3,692.36)Shares outstanding at the end of the year 18,611.08 416,468.42 841,466.33 24,560.52
Equivalent to a net asset value per share of: 10.87 19.67 22.37 18.21
TER is calculated in accordance with SFAMA (Swiss Funds and Asset Management Association).There were no performance fees on the fund as at 30 June 2019.
Performance history (unaudited)
Fund & Benchmark 1 year to 1 year to 1 year to 1 year to 1 year to
30 Jun 15 30 Jun 16 30 Jun 17 30 Jun 18 30 Jun 19
% % % % %
Asia-Pacifi c Property Equities Fund A2 (USD) (1.74) (1.96) 2.00 7.47 12.54 FTSE EPRA Nareit Pure Asia total return net dividend index (2.81) (0.08) 5.39 7.76 13.49(Capital constrained)
Performance quoted in the investment report relates to Class A2 (USD) shares.
Past performance is not a guide to future performance.
160
Asia-Pacifi c Property Equities Fund
Portfolio as at 30 June 2019 (continued)
Number
of Securities
Market
Value
USD
% of
Net
Assets
Transferable securities and money market instruments admitted to an offi cial exchange listing and/or dealt on another regulated market, unless otherwise stated.
Equities 93.06%
Australia 19.96%
Real Estate 19.96%
935,454 Arena REIT 1,805,467 2.32
78,809 Cromwell Property 63,768 0.08
331,658 Dexus Property REIT 3,028,636 3.88
2,394,830 GDI Property 2,311,064 2.96
543,281 Goodman 5,769,915 7.41
1,178,005 Mirvac 2,583,075 3.31
15,561,925 19.96
Hong Kong 22.17%
Real Estate 22.17%
726,500 CK Asset 5,691,317 7.30
537,284 Link REIT 6,606,805 8.47
293,920 Sun Hung Kai Properties 4,992,747 6.40
17,290,869 22.17
Japan 36.07%
Real Estate 36.07%
305 Daiwa Offi ce Investment REIT 2,190,913 2.81
1,773 Industrial & Infrastructure Fund Investment 2,206,371 2.83
3,714 Invincible Investment 1,924,603 2.47
297,600 Keihanshin Building 2,747,162 3.52
2,640 MCUBS MidCity Investment 2,489,710 3.19
228,300 Mitsui Fudosan 5,541,067 7.11
1,392 Nippon Prologis REIT 3,213,053 4.12
1,997 Nomura Real Estate Master Fund 3,071,166 3.94
2,972 Sekisui House REIT 2,225,964 2.85
2,283 Star Asia Investment REIT 2,520,883 3.23
28,130,892 36.07
Philippines 2.73%
Real Estate 2.73%
2,153,300 Ayala Land 2,128,712 2.73
Singapore 12.13%
Real Estate 12.13%
468,300 Ascendas REIT 1,081,573 1.39
3,031,200 ESR REIT 1,181,731 1.52
520,000 Frasers Centrepoint Trust 997,292 1.28
1,565,000 Frasers Logistics and Industrial Trust 1,393,744 1.79
* In the case of derivative instruments, Market Value refers to the net profi t or loss and is used in the calculation of the Fund NAV.
** Applicable for authorised funds per the SFC (Securities and Futures Commission) guidelines.Any diff erences in the percentage of Net Assets fi gures are the result of roundings.
161
Asia-Pacifi c Property Equities Fund
Top ten changes in the securities portfolio for the year
from 1 July 2018 to 30 June 2019
Description of Securities Purchases Sales
USD USD
Australia
Arena REIT 2,108,791 -
Dexus Property REIT 2,937,799 -
Goodman - 3,079,290
Scentre - 3,109,477
Hong Kong
CK Asset 4,555,467 2,811,838
Hongkong Land 2,888,258 3,018,133
Sun Hung Kai Properties - 2,977,994
Japan
Activia Properties - 3,321,489
Hulic - 3,622,700
Industrial & Infrastructure Fund Investment 2,132,939
Mitsui Fudosan 1,914,774 3,670,268
Mitsui Fudosan Logistics Park 2,340,072 -
Sekisui House REIT 2,196,797 -
Sumitomo Realty & Development - 4,323,441
Singapore
Ascendas REIT - 3,404,002
Mapletree Logistics Trust 2,047,436 -
Mapletree North Asia Commercial Trust 2,835,067 -
162
Biotechnology Fund
Investment Fund Managers
Andy Acker and Daniel Lyons
The fund returned 9.1% based on Class A2 US Dollar terms over the period under review, compared with the NASDAQ Biotechnology Total
Return Index which returned 5.3%.
An equity market sell-off at the end of 2018 weighed on health care stocks, including biotechnology. The sector then rebounded, along with
a broad market turnaround, in early 2019. The new year also marked the start of a surge in mergers and acquisitions (M&A), many of which
were announced at signifi cant premiums. In addition, demand for health care equipment and drug development services remained robust.
However, political uncertainty proved to be a headwind throughout the period, as were worries about growing competition for select biotech
and pharmaceutical drugs.
Our stock selection in biotechnology was the largest contributor to relative performance, while holdings in health care equipment weighed
on returns.
Insmed was the top contributor. The stock benefi ted from sales of its lead drug, Arikayce, an antibiotic that addresses nontuberculous
mycobacterial (NTM), a serious bacterial lung infection. The US Food and Drug Administration (FDA) approved Arikayce at the end of
September 2018, and in the fourth quarter of the same year the drug achieved $10 million in sales – four times the consensus estimate.
Consequently, we believe Arikayce sales could signifi cantly exceed street expectations for 2019. An estimated 200,000-plus people
worldwide are aff ected by NTM, with no other approved treatments.
Celgene also aided performance. The stock climbed after Bristol-Myers Squibb said it would acquire Celgene for $74 billion, representing a
roughly 50% premium. Bristol-Myers shareholders approved the acquisition in a vote in April. Meanwhile, Celgene continues to off er growth
potential. The company is a leader in haematological disease, with $15 billion in revenues in 2018. A key part of that success has been
Revlimid, which has become part of the standard of care for multiple myeloma. Although the drug will face generic competition at some
point in the mid 2020s, the US Patent and Trademark Offi ce recently dismissed an eff ort to challenge a key patent. As a result, Celgene
should be able to fend off generic competition for a while longer. We are also excited about the fi rm’s late-stage pipeline, which includes fi ve
key assets, each with more than $1 billion in sales potential.
BioCryst Pharmaceuticals was the top detractor. The stock declined after the company reported disappointing phase 3 trial results for
the fi rst oral drug to treat hereditary angioedema, a genetic disorder that leads to painful and sometimes fatal swelling. While the trial was
statistically signifi cant, and we feel the drug will receive regulatory approval, we believe it could capture less market share than originally
expected. Over the long term, we like BioCryst Pharmaceuticals’ focus on developing oral medicines for rare diseases such as complement-
mediated diseases and fi brodysplasia ossifi cans progressiva, a painful condition in which muscle tissue is gradually replaced by bone.
Wave Life Sciences also weighed on performance. The stock fell after the company announced a six-month delay to trial results for its
Huntington’s disease (HD) drug due to slower-than-expected enrolment. The stock then further declined after Wave delivered results for
a second drug addressing Duchenne muscular dystrophy (DMD) that showed some initial infusion reactions at higher dosages. While
disappointed by the volatility, we still think Wave could play a leading role in these large addressable markets: HD is a fatal genetic disease
that aff ects approximately 30,000 people in the US with few viable treatment options. DMD, another fatal genetic disease with no cure,
currently aff ects 10,000 people in the US. We remain optimistic about Wave’s platform and think the DMD treatment could be eff ective
even at lower dosage levels.
During the period, we added a number of new positions to the portfolio, including Takeda Pharmaceuticals ADR. The Japanese drug
maker recently completed its acquisition of Shire, an Irish pharmaceutical company. We believe the deal will help build out Takeda
Pharmaceuticals’ global footprint and bring new growth franchises in areas such as immunology and rare diseases. In our opinion, Takeda
Pharmaceuticals benefi ts from a capable management team, as evidenced by the company’s continued profi t margin expansion. The fi rm
has also invested in what we think are attractive assets being developed by small-cap biotech companies. Finally, we think the stock is
attractively valued.
We also bought Danaher. In February, Danaher announced it would acquire GE Healthcare’s bioprocessing business for $20 billion. In
our view, the acquisition, combined with plans to separate its underperforming dental business, signifi cantly improves Danaher’s profi le.
The resulting portfolio of assets is more durable, less cyclical, has a greater share of recurring revenue and competes in end markets with
stronger secular growth drivers. In short, we think Danaher is now a higher quality business with better long-term growth potential.
Another signifi cant add was IQVIA. The company – created by the merger of IMS Health and Quintiles in 2016 – provides advanced
analytics, technology solutions and research services to life sciences companies. The combined entity has led to new technology
applications built on the IMS Health database of more than 600 million patient records. That has resulted in improved clinical trial
productivity for clients, including faster patient recruitment. Consequently, IQVIA gained signifi cant market share in 2018 and recently
increased its long-term fi nancial guidance. Thanks to the fi rm’s signifi cant investments in technology and research and development (R&D),
we believe IQVIA’s competitive advantages should drive further market share gains.
Investment report for the period from 10 December 2018 to 30 June 2019
163
Biotechnology Fund
As always, we work to mitigate the impact of negative clinical trial results, as well as carefully assess a drug’s commercial potential.
Consequently, we sold some positions during the period. We decided to exit Biogen in early 2019 on increasing concerns about the clinical
risks of aducanumab, a highly anticipated drug for Alzheimer‘s disease. Shortly thereafter, Biogen announced it was halting clinical trials
due to disappointing results, causing the stock to drop by 30%.
We also sold Biohaven Pharmaceutical. The company develops therapies that target neurological disorders, including its lead drug
candidate, rimegepant, an oral treatment for migraines. Rimegepant delivered positive phase 3 trial results (as we had expected), which
caused the stock to run up signifi cantly on acquisition speculation. With the stock approaching our estimate of intrinsic value and concerns
about a high cash burn rate, we exited the position. Shortly thereafter, the company announced a large equity transaction, which caused a
signifi cant sell-off .
We continue to favour small and mid-size biotechnology fi rms, many of which are developing today’s innovative therapies for patients
with high, unmet medical needs. This contrasts with some large-cap biotech and pharmaceutical fi rms, which increasingly face patent
expirations for key products. Indeed, the 20 largest biopharmaceutical companies are generating more than $150 billion in free cash fl ow
annually, and many need additional products to drive their growth. With a backdrop of low interest rates and high innovation from small
companies, we expect to see more M&A and joint ventures as biotech and pharma giants seek to fortify their pipelines.
We also believe today’s rapid pace of innovation will persist. According to one industry report, R&D spending among pharmaceutical and
biotech companies is expected to grind higher, hitting $177 billion in 2019, up from $171 billion in 2018. Much of this investment is being
targeted at breakthrough therapies for rare or severe diseases and is leveraging innovative new treatment modalities (RNA, gene- and
cell-based therapies) and research platforms (gene editing and next generation sequencing). In our opinion, this innovation could benefi t not
only the biotech companies developing the therapies, but also the suppliers of health care equipment and research services. Consequently,
we have added to our holdings in these areas and expect to see continued growth.
Investment report for the period from 10 December 2018 to 30 June 2019 (continued)
164
Biotechnology Fund
Statement of Net Assets
As at 30 June 2019Notes USD
Assets
Investment in securities at market value 3 10,949,729 Cash at bank 12 642,083 Interest and dividends receivable 3 2,818 Subscriptions receivable -Receivable for investments sold -Unrealised gain on contracts for diff erence 3 2,275 Unrealised gain on futures contracts 3 -Unrealised gain on forward foreign exchange contracts 3 35 Purchased option contracts at market value 3 -Swap contracts at market value 3 -Other assets -Management fee rebate -Total assets 11,596,940
Liabilities
Bank overdraft 12 -Payable for investments purchased 140,302 Taxes and expenses payable 84,341 Redemptions payable -Unrealised loss on contracts for diff erence 3 -Unrealised loss on futures contracts 3 -Unrealised loss on forward foreign exchange contracts 3 -Sold option contracts at market value 3 255 Swap contracts at market value 3 -Dividends payable to shareholders -Interest and dividends payable on CFD 85 Other liabilities -Total liabilities 224,983
Net assets at the end of the period 11,371,957
Statement of Operations
For the period from 10 December 2018 to 30 June 2019Notes USD
Income
Dividend income (net of withholding tax) 3 17,053 Bond interest income 3 1,408 Income from collective investment schemes 3 -Derivative income 3 1,073 Interest received on contracts for diff erence 3 2,509 Other income 3, 13 1,505 Total income 23,548
Expenses
Management fees 6, 14 36,909 Administration, registrar and transfer agent fees 6 561 Custodian fees 6 2,342 Shareholder servicing fees and distribution fees 6, 14 71 Depositary fees 6 1,403 Other expenses 6 2,025 Derivative expenses 3 290 Interest paid on contracts for diff erence 3 337 Performance fees 6 64,989 Taxation ("taxe d'abonnement") 7 535 Total expenses 109,462
Net expense from investments (85,914)
Net realised gain/(loss)
Net realised gain on investment securities 3 129,301 Net realised gain on contracts for diff erence 3 31,052 Net realised loss on futures contracts 3 (101) Net realised gain/loss on swap contracts 3 -Net realised gain on options contracts 3 5,445 Net realised loss on forward foreign exchange contracts 3 (81) Net realised loss on currency exchange (307)
Net realised gain on investments and derivatives 165,309
Net change in unrealised appreciation/
depreciation
Change in net unrealised appreciation/depreciation on investments
3 317,301
Change in net unrealised appreciation/depreciation on contracts for diff erence
3 2,275
Change in net unrealised appreciation/depreciation on futures contracts
3 -
Change in net unrealised appreciation/depreciation on swap contracts
3 -
Change in net unrealised appreciation/depreciation on options contracts
3 443
Change in net unrealised appreciation/depreciation on forward foreign exchange contracts
3 35
Change in net unrealised appreciation/depreciation on currency exchange
-
Change in unrealised appreciation/depreciation on investments and derivatives
320,054
Net increase in assets as a result of operations 399,449
The accompanying notes form an integral part of these fi nancial statements.
165
Biotechnology Fund
Statement of Changes in Net Assets
For the period from 10 December 2018 to 30 June 2019Notes USD Notes USD
Net assets at the beginning of the period - Proceeds from shares issued 10,972,508 Net expense from investments (85,914) Payments for shares redeemed -Net realised gain on investments and derivatives 165,309 Net equalisation (paid)/received 10 -Change in unrealised appreciation/depreciation on investments and derivatives
320,054 Dividend distributions 11 -
Net assets at the end of the period 11,371,957
Share Transactions
For the period from 10 December 2018 to 30 June 2019A2
(USD)
E2
(USD)
E2 HEUR
(EUR)
H2
(USD)
IU2
(USD)
Shares outstanding at the beginning of the period - - - - -Shares issued during the period 2,748.78 2,690.87 219.50 250.00 1,035,171.72Shares redeemed during the period - - - - -Shares outstanding at the end of the period 2,748.78 2,690.87 219.50 250.00 1,035,171.72
Equivalent to a net asset value per share of: 10.91 10.96 10.80 10.93 10.92
TER is calculated in accordance with SFAMA (Swiss Funds and Asset Management Association).The amounts earned in relation to performance fees for the period are shown in note 6 to the fi nancial statements.* The share class launched in the period and the rate is annualised.The TER includes performance fees as at 30 June 2019.
Performance history (unaudited)
Fund & Benchmark Since launch to
30 Jun 19
%
Biotechnology Fund* A2 (USD) 9.10 NASDAQ Biotechnology Total Return Index 5.31
Performance quoted in the investment report relates to Class A2 (USD) shares.* on 10 December 2018, the Biotechnology Fund was launched.
Past performance is not a guide to future performance.
167
Biotechnology Fund
Portfolio as at 30 June 2019 (continued)
Number
of Securities
Market
Value
USD
% of
Net
Assets
Transferable securities and money market instruments admitted to an offi cial exchange listing and/or dealt on another regulated market, unless otherwise stated.
Investment in securities and derivatives 10,951,784 96.31
Other net assets 420,173 3.69
Total net assets 11,371,957 100.00
# In the case of derivative instruments, Commitment refers to the gross position taken by the Fund.
* In the case of derivative instruments, Market Value refers to the net profi t or loss and is used in the calculation of the Fund NAV.
Any diff erences in the percentage of Net Assets fi gures are the result of roundings.
Top ten changes in the securities portfolio for the
period from 10 December 2018 to 30 June 2019
Description of Securities Purchases Sales
USD USD
Belgium
Galapagos - 68,001
United States
Alexion Pharmaceuticals 415,262 169,308
AnaptysBio 284,800 -
Biogen - 150,195
Biohaven Pharmaceutical - 130,766
Celgene 824,958 89,035
Fibrogen - 57,302
Gilead Sciences 965,370 84,029
Illumina 299,155 -
Insmed 362,939 80,255
Mirati Therapeutics - 108,443
Neurocrine Biosciences 514,674 -
Regeneron Pharmaceuticals - 229,439
Thermo Fisher Scientifi c 297,533 -
Vertex Pharmaceuticals 765,674 -
Wave Life Sciences 303,062 -
169
China Fund
Investment Fund Managers
Charlie Awdry and May Ling Wee
The fund fell 8.0% based on Class A2 US Dollar terms over the year under review, compared with the benchmark MSCI China Index which
fell 6.7%.
It was another rollercoaster year for Chinese equities. Major indexes fell through the second half of calendar year 2018 as the economy
slowed under the government’s de-leveraging campaign (which focused on reforming the shadow banking sector) and then took an extra
knock from rising trade friction with the US, which negatively impacted consumer confi dence and business investment. January to April
2019 saw a strong rally from cheap valuation levels as Chinese authorities adjusted policy to a clear pro-growth mode and as President
Trump tweeted gradually more positive commentary regarding a possible trade truce with China. However, trade negotiations broke down
without a conclusion when President Trump increased tariff s. Chinese equity markets fell precipitously following the announcement of the
increases in May before staging a rally in June in the run up to a G20 meeting between Presidents Trump and Xi.
While our long book outperformed by falling less than the market, our short book detracted from relative returns by outperforming the
broader market. This attribution result is disappointing, as in previous time periods the short book has cushioned the portfolio’s return in
times of market weakness.
At the stock level, our top contributor was life insurer AIA, whose shares benefi ted from the company being allowed a larger geographical
footprint by China’s opening up of the fi nancial sector. A number of our top contributors to performance were consumer businesses,
including Shanghai-listed beer company Chongqing Brewery and domestic liquor brand Kweichow Moutai; both benefi ted from trading
up by consumers. Hong Kong-listed domestic sports brand Li Ning staged a strong operational recovery after some lean years, and
shares rose strongly. The fund also benefi ted from holding cyclical industrial names in the fi rst half of 2019; this included an A-share-listed
construction equipment maker Sany Heavy.
By far the largest detractor from performance was Brilliance China; BMW made a deal with the central government to increase their
stake in a joint venture with Brilliance. This was very disadvantageous to us and to the provincial government shareholders. We mistakenly
thought the governance risk was in the price, as the shares appeared very cheap; we learned our lesson, and after a share price rally in
2019, we exited our position.
Perhaps the biggest change in the China investment universe over the year was the derating of fashionable growth shares in the ‘new’
service sector economies of China represented by information technology, consumer and healthcare companies. As the economy slowed
and macroeconomic concerns grew, these shares fell to attractive levels that we feel represent ‘growth at a reasonable price’. Consequently,
we have rotated the portfolio more towards these areas of the market by adding back exposure to the Macau casino sector with holdings in
Sands China and Galaxy Entertainment.
The fund uses contracts for diff erence to implement short and long positions and uses standardised and exchange traded futures contracts
in order to take tactical views on the market and for effi cient portfolio management.
The escalation in the trade dispute between the US and China is symptomatic of the evolution of the bilateral relationship from one of
constructive mutual engagement to one of strategic rivalry. It appears all sides of the US political spectrum are developing a more hard-line
view towards China.
On the economic side, we are seeing more targeted domestic stimulus. The currency will also be a point of focus, because traditionally in
emerging markets, when stimulus eff orts need an extra boost but interest rates aren’t cut, currencies weaken.
For China, this negative turn in trade comes at a time when economic recovery momentum is proving weak. The country is continuing
with the important deleveraging programme that now pleasingly includes a tougher line on zombie banks (banks that are insolvent but that
continue to operate through government support). We are fi nally seeing zombie banks being restructured, with corporate deposits not being
fully guaranteed; this means that credit risk is becoming a real thing in domestic Chinese credit markets. Over the long term, this is a very
positive step; but over the short term, it may disrupt fi nancing channels and the interbank market – a development we are watching closely
and which makes us more confi dent in our zero weight position in banking shares.
Meanwhile, back in the equity markets, this sell off is increasingly bringing growth company equities back to attractive growth at reasonable
price levels. As such, we are seeing opportunities to buy despite the tough macroeconomic outlook.
Investment report for the year from 1 July 2018 to 30 June 2019
170
China Fund
Statement of Net Assets
As at 30 June 2019Notes USD
Assets
Investment in securities at market value 3 131,363,473 Cash at bank 12 20,024,587 Interest and dividends receivable 3 937,058 Subscriptions receivable 165,357 Receivable for investments sold -Unrealised gain on contracts for diff erence 3 3,477,947 Unrealised gain on futures contracts 3 1,080 Unrealised gain on forward foreign exchange contracts 3 -Purchased option contracts at market value 3 -Swap contracts at market value 3 -Other assets -Management fee rebate -Total assets 155,969,502
Liabilities
Bank overdraft 12 323,792 Payable for investments purchased 1,948,108 Taxes and expenses payable 524,327 Redemptions payable 1,981,612 Unrealised loss on contracts for diff erence 3 1,195,376 Unrealised loss on futures contracts 3 10,373 Unrealised loss on forward foreign exchange contracts 3 -Sold option contracts at market value 3 -Swap contracts at market value 3 -Dividends payable to shareholders 11 Interest and dividends payable on CFD 406,679 Other liabilities -Total liabilities 6,390,278
Net assets at the end of the year 149,579,224
Statement of Operations
For the year from 1 July 2018 to 30 June 2019Notes USD
Income
Dividend income (net of withholding tax) 3 2,737,116 Bond interest income 3 19,683 Income from collective investment schemes 3 -Derivative income 3 1,246,890 Interest received on contracts for diff erence 3 605,589 Other income 3, 13 53,629 Total income 4,662,907
Expenses
Management fees 6, 14 2,029,953 Administration, registrar and transfer agent fees 6 134,529 Custodian fees 6 74,217 Shareholder servicing fees and distribution fees 6, 14 841,081 Depositary fees 6 11,325 Other expenses 6 137,166 Derivative expenses 3 615,336 Interest paid on contracts for diff erence 3 1,572,798 Performance fees 6 -Taxation ("taxe d'abonnement") 7 81,062 Total expenses 5,497,467
Net expense from investments (834,560)
Net realised gain/(loss)
Net realised loss on investment securities 3 (19,345,316) Net realised loss on contracts for diff erence 3 (8,240,605) Net realised gain on futures contracts 3 384,259 Net realised gain/loss on swap contracts 3 -Net realised gain/loss on options contracts 3 -Net realised gain on forward foreign exchange contracts 3 5,720 Net realised loss on currency exchange (62,467)
Net realised loss on investments and derivatives (27,258,409)
Net change in unrealised appreciation/
depreciation
Change in net unrealised appreciation/depreciation on investments
3 5,544,388
Change in net unrealised appreciation/depreciation on contracts for diff erence
3 4,225,503
Change in net unrealised appreciation/depreciation on futures contracts
3 (179,563)
Change in net unrealised appreciation/depreciation on swap contracts
3 -
Change in net unrealised appreciation/depreciation on options contracts
3 -
Change in net unrealised appreciation/depreciation on forward foreign exchange contracts
3 -
Change in net unrealised appreciation/depreciation on currency exchange
20,710
Change in unrealised appreciation/depreciation on investments and derivatives
9,611,038
Net decrease in assets as a result of operations (18,481,931)
The accompanying notes form an integral part of these fi nancial statements.
171
China Fund
Statement of Changes in Net Assets
For the year from 1 July 2018 to 30 June 2019Notes USD Notes USD
Net assets at the beginning of the year 221,122,596 Proceeds from shares issued 87,149,172 Net expense from investments (834,560) Payments for shares redeemed (140,199,481) Net realised loss on investments and derivatives (27,258,409) Net equalisation (paid)/received 10 (11,121) Change in unrealised appreciation/depreciation on investments and derivatives
9,611,038 Dividend distributions 11 (11)
Net assets at the end of the year 149,579,224
Share Transactions
For the year from 1 July 2018 to 30 June 2019A1
(USD)
A2
(EUR)
A2
(SGD)
A2
(USD)
H1
(USD)
H2
(EUR)
Shares outstanding at the beginning of the year 183,366.61 924,613.93 253,195.29 7,727,101.91 125.00 125.00Shares issued during the year 50,931.61 369,142.87 55,930.11 3,571,810.54 0.61 31,324.14Shares redeemed during the year (63,713.49) (294,255.88) (68,110.50) (5,877,815.96) - (31,324.14)Shares outstanding at the end of the year 170,584.73 999,500.92 241,014.90 5,421,096.49 125.61 125.00
Equivalent to a net asset value per share of: 20.13 17.77 27.36 20.24 18.45 19.31
H2
(USD)
I2
(USD)
X2
(USD)
Shares outstanding at the beginning of the year 147,853.00 608,222.76 153,730.53Shares issued during the year 6,741.30 338,151.37 42,224.86Shares redeemed during the year (146,787.00) (589,185.51) (24,227.91)Shares outstanding at the end of the year 7,807.30 357,188.62 171,727.48
Equivalent to a net asset value per share of: 18.59 22.45 18.37
TER is calculated in accordance with SFAMA (Swiss Funds and Asset Management Association).There were no performance fees on the fund as at 30 June 2019.
Performance history (unaudited)
Fund & Benchmark 1 year to 1 year to 1 year to 1 year to 1 year to
30 Jun 15 30 Jun 16 30 Jun 17 30 Jun 18 30 Jun 19
% % % % %
China Fund A2 (USD) 21.32 (14.70) 34.31 17.64 (8.04) MSCI China Index 24.61 (23.37) 32.19 21.23 (6.73)
Performance quoted in the investment report relates to Class A2 (USD) shares.
Past performance is not a guide to future performance.
173
China Fund
Portfolio as at 30 June 2019 (continued)
Number
of Securities
Market
Value
USD
% of
Net
Assets
Transferable securities and money market instruments admitted to an offi cial exchange listing and/or dealt on another regulated market, unless otherwise stated.
Equities 82.70%
China 64.32%
Communication Services 10.69%
863,578 China South Publishing & Media
1,588,102 1.06
139,292 Huya ADR 3,469,067 2.32
13,700 NetEase.com ADR 3,581,865 2.39
162,800 Tencent 7,348,805 4.92
15,987,839 10.69
Consumer Discretionary 26.09%
77,713 Alibaba 13,283,872 8.87
143,587 Ctrip.com International ADR 5,329,232 3.55
2,733,000 Geely Automobile 4,679,228 3.13
759,994 Huayu Automotive Systems 2,388,487 1.60
448,500 Li Ning 1,059,649 0.71
479,946 Midea 3,619,436 2.42
31,544 New Oriental Education & Technology ADR
3,021,600 2.02
610,000 Qingdao Haier 1,534,293 1.03
89,600 Yum China 4,127,424 2.76
39,043,221 26.09
Consumer Staples 5.34%
329,997 Angel Yeast 1,518,224 1.01
439,910 Chongqing Brewery 'A' P-Note (CICC)
3,020,248 2.02
24,056 Kweichow Moutai 3,442,502 2.31
7,980,974 5.34
Energy 4.16%
3,637,000 CNOOC 6,217,672 4.16
Financials 4.37%
1,168,800 China International Capital 2,360,343 1.58
34,717 Noah ADR 1,465,578 0.98
226,000 Ping An Insurance 2,716,101 1.81
6,542,022 4.37
Health Care 3.37%
525,017 Jiangsu Hengrui Medicine 5,038,976 3.37
Industrials 4.44%
4,436,000 CRRC 3,712,277 2.48
2,263,738 Shenzhen Airport 2,928,397 1.96
6,640,674 4.44
Information Technology 0.81%
301,521 Hangzhou Hikvision Digital Technology
1,209,619 0.81
Materials 1.98%
1,110,000 Shandong Gold Mining 2,960,133 1.98
Portfolio as at 30 June 2019 (continued)
Number
of Securities
Market
Value
USD
% of
Net
Assets
Real Estate 1.14%
386,000 China Resources Land 1,701,627 1.14
Utilities 1.93%
296,700 ENN Energy 2,886,632 1.93
Hong Kong 18.38%
Communication Services 2.38%
2,241,000 HKT Trust & HKT 3,561,368 2.38
Consumer Discretionary 10.17%
4,017,800 Chow Tai Fook Jewellery 4,370,739 2.92
1,047,000 Galaxy Entertainment 7,055,731 4.72
1,182,000 Nexteer Automotive 1,472,765 0.98
484,000 Sands China 2,313,388 1.55
15,212,623 10.17
Financials 1.02%
43,000 Hong Kong Exchanges & Clearing
1,519,229 1.02
Health Care 1.79%
1,010,000 Hansoh Pharmaceutical 2,683,754 1.79
Real Estate 3.02%
367,500 Swire Pacifi c 4,516,673 3.02
Bonds 5.12%
Hong Kong 5.12%
Treasury Bill 5.12%
HKD 60,000,000 Hong Kong Monetary T-Bill 0% 21/08/2019
7,660,437 5.12
Investment in securities 131,363,473 87.82
Number
of Securities
Commitment#
USD
Market
Value
USD
% of
Net
Assets
Derivatives 1.52%*
Contracts for Diff erence 1.53%
Cross Currency Contracts for Diff erence 1.71%
(3,601,000) Agricultural Bank of China 'H'
1,510,211 (15,834) (0.01)
769,800 AIA 8,302,753 1,061,469 0.72
(226,800) ASM Pacifi c Technology 2,322,739 (110,044) (0.07)
1,778,000 China Construction Bank 'H' 1,531,183 136,478 0.09
(297,000) China Merchants Bank 'H' 1,482,333 (78,807) (0.05)
(3,000,000) China Minsheng Bank 2,080,286 34,030 0.02
(1,500,000) China Resources Cement 1,455,047 (100,178) (0.07)
916,000 China Resources Land 4,038,059 252,621 0.17
(1,000,000) Citic 1,440,641 (68,217) (0.05)
324,200 ENN Energy 3,154,183 183,096 0.12
(2,035,000) Fu Shou Yuan 1,787,687 (142,067) (0.09)
# In the case of derivative instruments, Commitment refers to the gross position taken by the Fund and is disclosed at absolute value.
* In the case of derivative instruments, Market Value refers to the net profi t or loss and is used in the calculation of the Fund NAV.
** Applicable for authorised funds per the SFC (Securities and Futures Commission) guidelines.Any diff erences in the percentage of Net Assets fi gures are the result of roundings.
Top ten changes in the securities portfolio for the year
Hong Kong Monetary T-Bill 0% 03/07/2019 6,351,112 -
Hong Kong Monetary T-Bill 0% 21/08/2019 7,611,729 -
Hong Kong Monetary T-Bill 0% 22/05/2019 7,623,867 7,643,647
Techtronic Industries - 9,117,185
Xinyi Glass 4,618,802 -
Portfolio as at 30 June 2019 (continued)
175
Global Equity Income Fund
Investment Fund Managers
Ben Lofthouse and Andrew Jones
The fund returned 0.1% based on Class A2 US Dollar terms over the year under review, compared to the benchmark MSCI World Index
return of 6.3%.
Despite concerns about the pace of global economic growth, trade war protectionism and diffi cult Brexit negotiations, global equity markets
continued to perform well. The US equity market outperformed the MSCI Index World, while Japan, Europe and the UK lagged. At a sector
level, the strongest performances came from information technology (IT), utilities, consumer staples and healthcare, while more cyclical
areas such as materials, fi nancials and energy underperformed the market.
The fund had a disappointing year against its benchmark with some of the fund’s holdings in the energy and fi nancials sector being
particularly negative for performance. Occidental Petroleum fell after announcing the acquisition of Anardarko, despite committing to its
dividend policy following the deal’s completion. The continued low interest rate environment led to poor performance from banks during
the year and as a result holdings such as ING and Nordea also detracted from returns. Carnival, a leading global cruise company, also
performed poorly following the release of disappointing results. These holdings have all been retained as the valuations are now very
attractive with signifi cant dividend yield premiums for each.
The fund’s holdings in the information technology sectors were positive for performance with Microsoft, Cisco and Maxim Integrated
Products all performing well against the benchmark. A number of the fund’s more defensive holdings also performed well as they continued
to deliver good results, including RELX, Tele2 and Novartis.
The fund established new positions in Telus, a leading Canadian telecommunications company, and international pharmaceuticals fi rm
Sanofi . The Canadian telecommunications market is less mature than a number of other developed markets and has a more favourable
structure, with three companies in most segments rather than the four that are frequently found in other countries. Telus yields over 4.5%
and is expected to continue to deliver dividend growth of between 7–10%. Sanofi , meanwhile, is well placed to grow its profi ts relative to its
peers, is valued at a large discount on a price to earnings basis and yields 4%.
The fund also bought positions in Michelin, Veolia Entertainment and Henkel. Veolia yields almost 4% and is well positioned for growth as
an international waste and water company. Henkel – the health, personal products and adhesives company – has a strong balance sheet
and should benefi t from restructuring and initiatives to improve top line performance. Meanwhile, Michelin, as a leading global tyre company,
is well placed to benefi t from the ongoing replacement market for both higher margin SUV tyres and, in the future, electric vehicle tyres.
These purchases were funded by trimming positions in Maxim Integrated Products, Microsoft and Crown Castle International after a year of
strong performance.
Having had a very weak second half of 2018, equity markets have rebounded strongly in 2019 as most major areas of the world continue to
deliver reasonable GDP growth, albeit at a lower level than anticipated. Despite the good performance of equity markets, valuations remain
reasonable in a historical context and, on a yield basis, continue to look attractive relative to bonds. The fund will continue with its existing
strategy of identifying companies that are attractively valued, pay a sustainable dividend and have the capacity to grow their dividends over
the medium to long term.
Investment report for the year from 1 July 2018 to 30 June 2019
176
Global Equity Income Fund
Statement of Net Assets
As at 30 June 2019Notes USD
Assets
Investment in securities at market value 3 6,441,893 Cash at bank 12 521,259 Interest and dividends receivable 3 10,074 Subscriptions receivable -Receivable for investments sold -Unrealised gain on contracts for diff erence 3 -Unrealised gain on futures contracts 3 -Unrealised gain on forward foreign exchange contracts 3 -Purchased option contracts at market value 3 -Swap contracts at market value 3 -Other assets 2,938 Management fee rebate -Total assets 6,976,164
Liabilities
Bank overdraft 12 -Payable for investments purchased 61,108 Taxes and expenses payable 18,978 Redemptions payable -Unrealised loss on contracts for diff erence 3 -Unrealised loss on futures contracts 3 -Unrealised loss on forward foreign exchange contracts 3 -Sold option contracts at market value 3 -Swap contracts at market value 3 -Dividends payable to shareholders 7,540 Interest and dividends payable on CFD -Other liabilities -Total liabilities 87,626
Net assets at the end of the year 6,888,538
Statement of Operations
For the year from 1 July 2018 to 30 June 2019Notes USD
Income
Dividend income (net of withholding tax) 3 240,648 Bond interest income 3 -Income from collective investment schemes 3 -Derivative income 3 -Interest received on contracts for diff erence 3 -Other income 3, 13 5,409 Total income 246,057
Expenses
Management fees 6, 14 56,198 Administration, registrar and transfer agent fees 6 2,054 Custodian fees 6 9,008 Shareholder servicing fees and distribution fees 6, 14 4,192 Depositary fees 6 1,704 Other expenses 6 13 Derivative expenses 3 -Interest paid on contracts for diff erence 3 -Performance fees 6 -Taxation ("taxe d'abonnement") 7 1,020 Total expenses 74,189
Net income from investments 171,868
Net realised gain/(loss)
Net realised loss on investment securities 3 (68,580) Net realised gain/loss on contracts for diff erence 3 -Net realised gain/loss on futures contracts 3 -Net realised gain/loss on swap contracts 3 -Net realised gain/loss on options contracts 3 -Net realised gain on forward foreign exchange contracts 3 162 Net realised loss on currency exchange (1,842)
Net realised loss on investments and derivatives (70,260)
Net change in unrealised appreciation/
depreciation
Change in net unrealised appreciation/depreciation on investments
3 (35,909)
Change in net unrealised appreciation/depreciation on contracts for diff erence
3 -
Change in net unrealised appreciation/depreciation on futures contracts
3 -
Change in net unrealised appreciation/depreciation on swap contracts
3 -
Change in net unrealised appreciation/depreciation on options contracts
3 -
Change in net unrealised appreciation/depreciation on forward foreign exchange contracts
3 -
Change in net unrealised appreciation/depreciation on currency exchange
79
Change in unrealised appreciation/depreciation on investments and derivatives
(35,830)
Net increase in assets as a result of operations 65,778
The accompanying notes form an integral part of these fi nancial statements.
177
Global Equity Income Fund
Statement of Changes in Net Assets
For the year from 1 July 2018 to 30 June 2019Notes USD Notes USD
Net assets at the beginning of the year 6,675,166 Proceeds from shares issued 380,019 Net income from investments 171,868 Payments for shares redeemed (215,439) Net realised loss on investments and derivatives (70,260) Net equalisation (paid)/received 10 3,632 Change in unrealised appreciation/depreciation on investments and derivatives
(35,830) Dividend distributions 11 (20,618)
Net assets at the end of the year 6,888,538
Share Transactions
For the year from 1 July 2018 to 30 June 2019A2
(USD)
A3
(EUR)
A3
(USD)
E3
(USD)
H2
(EUR)
H3
(EUR)
Shares outstanding at the beginning of the year 2,049.26 1,797.22 2,761.83 226.93 817.30 23.23Shares issued during the year 2,786.88 89.85 314.08 1.03 93.22 0.88Shares redeemed during the year (1,719.97) (73.54) (5.16) - (117.73) -Shares outstanding at the end of the year 3,116.17 1,813.53 3,070.75 227.96 792.79 24.11
Equivalent to a net asset value per share of: 112.34 114.65 92.30 109.15 138.22 106.86
I2
(USD)
I3
(USD)
X3
(USD)
Shares outstanding at the beginning of the year 49,276.13 26.93 -Shares issued during the year - 1.02 225.61Shares redeemed during the year - - -Shares outstanding at the end of the year 49,276.13 27.95 225.61
Equivalent to a net asset value per share of: 118.51 111.22 101.73
TER is calculated in accordance with SFAMA (Swiss Funds and Asset Management Association).* The share class launched in the year and the rate is annualised.There were no performance fees on the fund as at 30 June 2019.
Performance history (unaudited)
Fund & Benchmark 1 year to 1 year to 1 year to 1 year to 1 year to
30 Jun 15 30 Jun 16 30 Jun 17 30 Jun 18 30 Jun 19
% % % % %
Global Equity Income Fund A2 (USD) (2.63) (5.11) 13.54 4.50 0.08 MSCI World Index 1.97 (2.66) 18.20 11.09 6.33
Performance quoted in the investment report relates to Class A2 (USD) shares.
Past performance is not a guide to future performance.
179
Global Equity Income Fund
Portfolio as at 30 June 2019 (continued)
Number
of Securities
Market
Value
USD
% of
Net
Assets
Transferable securities and money market instruments admitted to an offi cial exchange listing and/or dealt on another regulated market, unless otherwise stated.
Investment in securities (cost USD 5,920,963*) 6,441,893 93.52
Other net assets 446,645 6.48
Total net assets 6,888,538 100.00
* Applicable for authorised funds per the SFC (Securities Financing Commission) guidelines.Any diff erences in the percentage of Net Assets fi gures are the result of roundings.
181
Global Equity Income Fund
Top ten changes in the securities portfolio for the year
from 1 July 2018 to 30 June 2019
Description of Securities Purchases Sales
USD USD
Australia
BHP 69,410 -
Canada
Telus 80,913 -
France
BNP Paribas 69,425 -
Michelin 81,530 -
Sanofi 136,375 -
Veolia Environnement 99,646 -
Germany
Bayer - 103,141
Deutsche Post - 126,057
Deutsche Telekom - 89,216
Henkel 67,049 -
Italy
ENI 77,976 -
Japan
Mitsubishi UFJ Financial - 64,915
United Kingdom
GlaxoSmithKline 69,557 -
ITV - 94,739
RELX - 64,663
Standard Chartered - 84,636
United States
Best Buy - 67,688
Blackstone - 92,221
Carnival 130,322 -
Microsoft - 70,833
182
Global Multi-Asset Fund
Investment Fund Managers
Paul O‘Connor, Oliver Blackbourn and Nicholas Harper
The fund returned 3.1% based on Class A2 in Sterling terms over the year under review.
The year to June 2019 was characterised by three sharp selloff s, the largest of which was in December 2018, as investors became
concerned about global growth and the pace of US interest rate increases. Ongoing trade tensions between the US and China ebbed and
fl owed, but a shift to a more dovish stance from major developed market central banks saw most fi nancial assets rally strongly in the fi rst
six months of 2019.
Global growth waned over the year as measures of economic activity tempered across developed and emerging markets, and infl ation
expectations were revised downwards. As a result, the Federal Reserve abruptly pivoted its guidance on future interest rates to indicate
no further increase in 2019 and a cut in 2020, while also ending the process of quantitative tightening. This easing of monetary conditions
caused the markets to price in four interest rate cuts by the end of 2020. The European Central Bank also made a clear dovish shift by
moving to delay the date it might increase interest rates in the future. This policy shift from two pre-eminent developed market central
banks had the eff ect of pushing sovereign bond yields lower (prices move inversely to yields) and resulted in one measure of US yield
curve steepness (the diff erence between the 10-year and the three-month yields) inverting in March, a potential sign of an upcoming US
recession. However, the US labour market remained solid, suggesting that the slowdown is mostly confi ned to the manufacturing sector for
the time being.
Geopolitical headlines were dominated by the US-China trade confl ict, further accompanied by episodes between the US and other
countries, including Mexico, Canada, India, Turkey and the European Union. The Sino-American dispute escalated in May, with Huawei –
the telecommunications infrastructure provider – at the centre of national security concerns, as the clash widened from focusing on trade
imbalances to technological and information issues. The position of both countries became more entrenched over the year, and the increase
in hardline pressures from internal actors in both countries shows little indication of a resolution in the near term, despite an apparent
ceasefi re following the G20 meeting in Osaka.
It was pleasing to see that performance was broad based across asset classes, given market volatility, with positive contributions coming
(in order) from fi xed income, alternatives and equities. Currency positions were the main detractor, predominantly due to US Dollar hedging
positions. Fixed income holdings were the largest positive contributors to performance, led by investment grade corporate bonds and
emerging market debt. The iShares JPMorgan USD Emerging Market Bond UCITS ETF was the largest contributor, followed by the iShares
USD Corporate Bond UCITS ETF. However, each area of fi xed income added positively to performance over the year. Alternatives also
contributed strongly to performance, led by positions in gold and the BH Macro strategy. Performance was more mixed across regional
equity markets, with the US and emerging markets contributing signifi cantly to performance, alongside the global minimum volatility
strategy. Holdings of UK and Japanese equities were detractors over the year.
Over the reporting year, the fund remained active in its equity positioning as market volatility created both risks and opportunities. A number
of broad themes impacted weightings in equity markets: changes in central bank policy stances, the developments of geopolitical events,
investor positioning and valuations. Following a more diffi cult period, the fund took advantage of attractive entry points following market
selloff s in the fi nal quarter of 2018. Over the reporting year, the fund reduced overall equity positioning, owing to ongoing concerns over US-
led global trade war developments, faltering global growth and a rise in stock market valuations following the shift in monetary policy.
In fi xed income, duration (a measure of interest rate sensitivity) profi les were initially reduced on the back of rising yields as global growth
expectations stayed positive. Hard currency emerging market debt was also added to as valuations widened. During the fi rst quarter of
2019, additions were made to US investment grade and European high yield, as widening spreads (the extra yield over an equivalent
government security) provided better valuations, while improving diversifi cation within the portfolio. In May, mid-risk assets – such as high
yield – were increased, funded by reductions in equities, to take advantage of a more favourable risk/return dynamic given the level of
uncertainty about economic growth. The fund’s duration profi le was increased as trade war concerns escalated with potential knock-on
eff ects on investor sentiment and global growth.
The holdings in alternative assets were increased through new positions in gold. The position acted as a good diversifi er away from risk
assets within the portfolio, amid a rise in market volatility and geopolitical uncertainty.
With the amount of negative yielding debt hitting new highs and equity markets delivering 15–20% over the fi rst half of the year, it is diffi cult
to be overly bullish about the prospects for the remainder of the year. A lot has now been priced in for central bank policy support against
a backdrop of slowing economic momentum. While we can fi nd green shoots, we are mindful of the dark clouds overhead. We look to
mid-risk assets to deliver more consistent returns going forward, while at the same time building in fl exibility to respond appropriately
to expected volatility. We do not feel it is time to get too bearish just yet; however, expensive valuations also temper how bullish we can
become.
Investment report for the year from 1 July 2018 to 30 June 2019
183
Global Multi-Asset Fund
Statement of Net Assets
As at 30 June 2019Notes GBP
Assets
Investment in securities at market value 3 146,877,067 Cash at bank 12 3,348,027 Interest and dividends receivable 3 87,073 Subscriptions receivable -Receivable for investments sold -Unrealised gain on contracts for diff erence 3 -Unrealised gain on futures contracts 3 141,326 Unrealised gain on forward foreign exchange contracts 3 303,744 Purchased option contracts at market value 3 -Swap contracts at market value 3 -Other assets -Management fee rebate 111,000 Total assets 150,868,237
Liabilities
Bank overdraft 12 60,429 Payable for investments purchased 343,520 Taxes and expenses payable 70,893 Redemptions payable 4,543 Unrealised loss on contracts for diff erence 3 -Unrealised loss on futures contracts 3 5,775 Unrealised loss on forward foreign exchange contracts 3 54,750 Sold option contracts at market value 3 -Swap contracts at market value 3 -Dividends payable to shareholders 262 Interest and dividends payable on CFD -Other liabilities -Total liabilities 540,172
Net assets at the end of the year 150,328,065
Statement of Operations
For the year from 1 July 2018 to 30 June 2019Notes GBP
Income
Dividend income (net of withholding tax) 3 390,307 Bond interest income 3 89,731 Income from collective investment schemes 3 1,553,787 Derivative income 3 5,813 Interest received on contracts for diff erence 3 -Other income 3, 13 118,312 Total income 2,157,950
Expenses
Management fees 6, 14 10,218 Administration, registrar and transfer agent fees 6 34,884 Custodian fees 6 40,187 Shareholder servicing fees and distribution fees 6, 14 3,796 Depositary fees 6 8,961 Other expenses 6 49,067 Derivative expenses 3 1,326 Interest paid on contracts for diff erence 3 -Performance fees 6 -Taxation ("taxe d'abonnement") 7 14,639 Total expenses 163,078
Net income from investments 1,994,872
Net realised gain/(loss)
Net realised gain on investment securities 3 2,138,178Net realised gain/loss on contracts for diff erence 3 -Net realised loss on futures contracts 3 (679,527)Net realised gain/loss on swap contracts 3 -Net realised gain/loss on options contracts 3 -Net realised loss on forward foreign exchange contracts 3 (1,190,359) Net realised gain on currency exchange 4,153
Net realised gain on investments and derivatives 272,445
Net change in unrealised appreciation/
depreciation
Change in net unrealised appreciation/depreciation on investments
3 3,467,404
Change in net unrealised appreciation/depreciation on contracts for diff erence
3 -
Change in net unrealised appreciation/depreciation on futures contracts
3 293,820
Change in net unrealised appreciation/depreciation on swap contracts
3 -
Change in net unrealised appreciation/depreciation on options contracts
3 -
Change in net unrealised appreciation/depreciation on forward foreign exchange contracts
3 355,919
Change in net unrealised appreciation/depreciation on currency exchange
21,851
Change in unrealised appreciation/depreciation on investments and derivatives
4,138,994
Net increase in assets as a result of operations 6,406,311
The accompanying notes form an integral part of these fi nancial statements.
184
Global Multi-Asset Fund
Statement of Changes in Net Assets
For the year from 1 July 2018 to 30 June 2019Notes GBP Notes GBP
Net assets at the beginning of the year 135,518,673 Proceeds from shares issued 8,648,077 Net income from investments 1,994,872 Payments for shares redeemed (299,010) Net realised gain on investments and derivatives 272,445 Net equalisation (paid)/received 10 54,276 Change in unrealised appreciation/depreciation on investments and derivatives
4,138,994 Dividend distributions 11 (262)
Net assets at the end of the year 150,328,065
Share Transactions
For the year from 1 July 2018 to 30 June 2019A1 HEUR
(EUR)
A2
(GBP)
A2 HEUR
(EUR)
A2 HUSD
(USD)
H1 HEUR
(EUR)
H2
(GBP)
Shares outstanding at the beginning of the year 12,687.44 18,936.26 27,447.31 12,338.09 250.00 250.00Shares issued during the year 5,015.58 - 3,997.42 5,014.18 0.62 -Shares redeemed during the year (12,895.66) (6,228.75) (6,503.96) (2,462.70) - -Shares outstanding at the end of the year 4,807.36 12,707.51 24,940.77 14,889.57 250.62 250.00
Equivalent to a net asset value per share of: 11.03 11.51 11.07 11.92 10.18 10.47
H2 HEUR
(EUR)
IU2 HEUR
(EUR)
IU2 HUSD
(USD)
X2 HEUR
(EUR)
Z2
(GBP)
Shares outstanding at the beginning of the year 62,493.21 1,000.00 1,000.00 4,276.71 9,142,831.00Shares issued during the year 719.64 - - 6,630.22 578,544.73Shares redeemed during the year (92.75) - - (2,839.24) -Shares outstanding at the end of the year 63,120.10 1,000.00 1,000.00 8,067.69 9,721,375.73
Equivalent to a net asset value per share of: 11.30 11.29 12.14 10.82 15.33
TER is calculated in accordance with SFAMA (Swiss Funds and Asset Management Association).The TER includes a synthetic element of 0.30% to incorporate the TER of the underlying funds.The fund is not subject to performance fees.
Performance history (unaudited)
Fund Since launch to 1 year to 1 year to 1 year to
30 Jun 16 30 Jun 17 30 Jun 18 30 Jun 19
% % % %
Global Multi-Asset Fund* A2 (GBP) 0.20 8.18 2.95 3.14
Performance quoted in the investment report relates to Class A2 (GBP) shares.* On 24 July 2015 Global Multi-Asset Fund was launched.
Past performance is not a guide to future performance.
186
Global Multi-Asset Fund
Portfolio as at 30 June 2019 (continued)
Number
of Securities
Market
Value
GBP
% of
Net
Assets
Transferable securities and money market instruments admitted to an offi cial exchange listing and/or dealt on another regulated market, unless otherwise stated.
Alternatives 9.53%
51,114 ETFS Physical Gold USD 5,406,703 3.59
384,570 L&G Longer Dated All Commodities UCITS ETF 4,206,872 2.80
33,833 Montlake Dunn WMA UCITS Fund 4,713,457 3.14
14,327,032 9.53
Asia ex Japan Equity 2.64%
508,926 First State Asia Pacifi c Leaders Fund B Accumulation
3,965,503 2.64
Cash 17.18%
25,825,713 Deutsche Global Liquidity Managed Platinum Sterling Fund
25,825,713 17.18
Corporate Bonds 21.14%
3,469,539 AXA US Short Duration High Yield Fund ZI Gross Accumulation
4,985,727 3.31
48,854 iShares USD Corporate Bond UCITS ETF 4,563,767 3.04
57,943 iShares USD Short Duration Corp Bond UCITS ETF 4,647,381 3.09
1,355,618 Janus Henderson All Stocks Credit Fund Z Accumulation+
3,441,975 2.29
37,161 Janus Henderson Horizon Euro High Yield Bond Fund Z2 Accumulation+
3,856,778 2.57
34,922 Janus Henderson Horizon Global High Yield Bond Fund Z2 Accumulation+
4,894,235 3.26
42,631 Janus Henderson Horizon Total Return Bond Fund Z2 Accumulation+
5,400,283 3.58
31,790,146 21.14
Emerging Market Debt 2.92%
46,798 BlackRock Emerging Markets Flexi Dynamic Bond Fund I2
4,385,537 2.92
Europe ex UK Equity 5.97%
245,612 Janus Henderson European Selected Opportunities Fund I Accumulation+
4,693,658 3.12
2,171,509 Montanaro European Income Fund Sterling Distribution
Investment in securities and derivatives 147,261,612 97.96
Other net assets 3,066,453 2.04
Total net assets 150,328,065 100.00
* In the case of derivative instruments, Market Value refers to the net profi t or loss and is used in the calculation of the Fund NAV.
+ Related party to the fund.Any diff erences in the percentage of Net Assets fi gures are the result of roundings.
Top ten changes in the securities portfolio for the year
from 1 July 2018 to 30 June 2019
Description of Securities Purchases Sales
GBP GBP
Ireland
Absolute Insight Emerging Market Debt Fund Accumulation - 3,876,676
Deutsche Global Liquidity Managed Platinum Sterling Fund 22,472,000 20,411,000
iShares Core MSCI EM IMI UCITS ETF 6,710,752 7,987,846
Luxembourg
Janus Henderson Fund Emerging Markets Fund R$ Accumulation
- 4,621,233
Janus Henderson Horizon Euro High Yield Bond Fund Z2 Accumulation
3,607,160 -
United Kingdom
ETFS Physical Gold USD 6,058,541 -
iShares JPMorgan USD Emerging Markets Bond UCITS ETF
4,303,596 -
iShares USD Corporate Bond UCITS ETF 6,825,736 2,762,448
Janus Henderson Horizon Global High Yield Bond Fund Z2 Accumulation
2,983,023 -
Janus Henderson Institutional High Alpha UK Equity Fund Z Accumulation
- 4,495,531
LF Morant Wright Nippon Yield Fund B Accumulation - 4,600,124
UK Treasury 0.125% Index-Linked 22/03/2026 3,497,230 3,596,652
UK Treasury 1.875% Index-Linked 22/11/2022 - 1,919,991
UK Treasury 2.00% 22/07/2020 5,248,609 -
United States
iShares $ TIPS UCITS ETF 5,615,042 -
iShares II USD TIPS ETF - 4,187,661
188
Global Natural Resources Fund
Investment Fund Managers
David Whitten, Daniel Sullivan and Darko Kuzmanovic
The fund fell 9.0% based on Class A2 US Dollar terms over the year under review, compared with S & P Global Natural Resources
Accumulation Index which fell 4.6%.
Mining contributed -0.8%, energy -4.3% and agriculture -1.0%.
In the mining sector, positive contributors were generally confi ned to iron ore and gold companies. Large contributors included BHP, Rio
Tinto and Anglo American. These companies benefi ted from the 69% increase in iron ore prices over the year, mainly due to Brazilian
supply issues in the fi rst half of 2019. In the gold sub-sector, Kirkland Lake Gold, Newmont Goldcorp, Agnico Eagle Mines and B2Gold
performed well. Sentiment towards the gold sector improved with the 13% increase in the gold price on rising geopolitical and trade war
risks. The trade war escalation between the US and China and a stronger US Dollar also resulted in weaker base metal prices. Alcoa was
a signifi cant detractor with the aluminium price falling 17% and a sharply lower alumina price over the year. The copper company Freeport-
McMoRan C & G fell with the weaker copper price.
In the energy sector, wind turbine company Vestas Wind Systems was a positive contributor. Detractors included the exploration &
production sub-sector, in particular the North American oil and gas producers Canadian Natural Resources, EOG Resources and Suncor
Energy. The West Texas Intermediate crude oil price fell 22% and US natural gas price fell 21% on continuing new supply growth from
the prolifi c onshore US oil shale basins. In agriculture, salmon company Mowi and US-based protein company Tyson Foods were positive
contributors. Costa Group fell sharply due to operational issues and earnings downgrades. Stora Enso and Archer Daniels-Midland also
detracted.
Our overweight position in the mining sector was condensed throughout the year. The overall iron ore exposure was steadily reduced as
the iron ore price dramatically rose following Vale’s tailings dam accident and the subsequent enforced cuts in Brazilian supply. Other
reasons for reducing the mining sector exposure included weaker earnings forecasts from falling base metal prices, ongoing US trade
war uncertainty and a change in sentiment towards the lithium sector and subsequent weakening lithium prices. In addition, a number of
smaller capitalisation mining positions were reduced or closed. Reductions in the mining space were used to fund purchases in agriculture
and energy. The weighting towards the integrated energy majors was substantially increased due to attractive relative valuation metrics.
In agriculture, positioning in the paper packaging and paper products sub-industries was increased, especially towards leading European
companies leveraged to the growth in the global containerboard market.
The outlook for global natural resources equities remains supportive. By the end of June 2019, the fund was close to neutral weight across
the mining, energy and agriculture sectors. On most valuation metrics, the mining sector appears attractive. The recovery across many
mining commodities since early 2016, ongoing mining project capital discipline, and a general reduction in overall debt means that the
earnings upgrade cycle and cash fl ow generation of the mining sector continues to improve. The ongoing trade war concern remains a
threat to global economic growth. In energy, production restraint from the Organization of the Petroleum Exporting Countries has improved
the supply and demand balance and resulted in a recovery from oil price lows. Longer term, the impact from the likely penetration of electric
vehicles is a demand threat. Renewable energy is an increasing area of investment interest. We see longer term opportunities from the
rapid agricultural industry consolidation of many of the leading crop protection, seed technology and fertiliser companies. Across agriculture,
we hold advantaged food companies, agricultural product distributors, agricultural machinery companies and agricultural companies that we
believe exhibit global reach and technological leadership.
Investment report for the year from 1 July 2018 to 30 June 2019
189
Global Natural Resources Fund
Statement of Net Assets
As at 30 June 2019Notes USD
Assets
Investment in securities at market value 3 7,398,497 Cash at bank 12 241,736 Interest and dividends receivable 3 7,134 Subscriptions receivable -Receivable for investments sold 1,182 Unrealised gain on contracts for diff erence 3 -Unrealised gain on futures contracts 3 -Unrealised gain on forward foreign exchange contracts 3 -Purchased option contracts at market value 3 -Swap contracts at market value 3 -Other assets 576 Management fee rebate -Total assets 7,649,125
Liabilities
Bank overdraft 12 -Payable for investments purchased -Taxes and expenses payable 30,040 Redemptions payable 5,203 Unrealised loss on contracts for diff erence 3 -Unrealised loss on futures contracts 3 -Unrealised loss on forward foreign exchange contracts 3 -Sold option contracts at market value 3 -Swap contracts at market value 3 -Dividends payable to shareholders -Interest and dividends payable on CFD -Other liabilities -Total liabilities 35,243
Net assets at the end of the year 7,613,882
Statement of Operations
For the year from 1 July 2018 to 30 June 2019Notes USD
Income
Dividend income (net of withholding tax) 3 276,456 Bond interest income 3 -Income from collective investment schemes 3 -Derivative income 3 -Interest received on contracts for diff erence 3 -Other income 3, 13 6,443 Total income 282,899
Expenses
Management fees 6, 14 40,896 Administration, registrar and transfer agent fees 6 2,670 Custodian fees 6 29,037 Shareholder servicing fees and distribution fees 6, 14 8,029 Depositary fees 6 1,704 Other expenses 6 13,745 Derivative expenses 3 -Interest paid on contracts for diff erence 3 -Performance fees 6 -Taxation ("taxe d'abonnement") 7 1,304 Total expenses 97,385
Net income from investments 185,514
Net realised gain/(loss)
Net realised loss on investment securities 3 (12,356) Net realised gain/loss on contracts for diff erence 3 -Net realised gain/loss on futures contracts 3 -Net realised gain/loss on swap contracts 3 -Net realised gain/loss on options contracts 3 -Net realised loss on forward foreign exchange contracts 3 (992) Net realised gain on currency exchange 5,883
Net realised loss on investments and derivatives (7,465)
Net change in unrealised appreciation/
depreciation
Change in net unrealised appreciation/depreciation on investments
3 (943,940)
Change in net unrealised appreciation/depreciation on contracts for diff erence
3 -
Change in net unrealised appreciation/depreciation on futures contracts
3 -
Change in net unrealised appreciation/depreciation on swap contracts
3 -
Change in net unrealised appreciation/depreciation on options contracts
3 -
Change in net unrealised appreciation/depreciation on forward foreign exchange contracts
3 -
Change in net unrealised appreciation/depreciation on currency exchange
(13)
Change in unrealised appreciation/depreciation on investments and derivatives
(943,953)
Net decrease in assets as a result of operations (765,904)
The accompanying notes form an integral part of these fi nancial statements.
190
Global Natural Resources Fund
Statement of Changes in Net Assets
For the year from 1 July 2018 to 30 June 2019Notes USD Notes USD
Net assets at the beginning of the year 10,049,526 Proceeds from shares issued 229,738 Net income from investments 185,514 Payments for shares redeemed (1,891,244) Net realised loss on investments and derivatives (7,465) Net equalisation (paid)/received 10 (8,234) Change in unrealised appreciation/depreciation on investments and derivatives
(943,953) Dividend distributions 11 -
Net assets at the end of the year 7,613,882
Share Transactions
For the year from 1 July 2018 to 30 June 2019A2
(EUR)
A2
(USD)
H2
(EUR)
H2
(GBP)
I2
(EUR)
I2
(GBP)
Shares outstanding at the beginning of the year 9,893.70 868.22 25.00 25.00 33,093.40 22,109.63Shares issued during the year 1,003.69 83.83 - - 736.40 -Shares redeemed during the year (3,307.29) - - - (11,381.77) -Shares outstanding at the end of the year 7,590.10 952.05 25.00 25.00 22,448.03 22,109.63
Equivalent to a net asset value per share of: 100.79 104.74 97.44 129.03 106.42 131.40
X2
(EUR)
Shares outstanding at the beginning of the year 2,544.46Shares issued during the year 133.23Shares redeemed during the year (660.43)Shares outstanding at the end of the year 2,017.26
Equivalent to a net asset value per share of: 97.46
TER is calculated in accordance with SFAMA (Swiss Funds and Asset Management Association).There were no performance fees on the fund as at 30 June 2019.
Performance history (unaudited)
Fund & Benchmark Since launch to 1 year to 1 year to 1 year to 1 year to
30 Jun 15 30 Jun 16 30 Jun 17 30 Jun 18 30 Jun 19
% % % %
Global Natural Resources Fund* A2 (USD) (5.74) (2.92) 3.99 18.19 (8.99) S & P Global Natural Resources Accumulation Index (0.70) (9.47) 14.70 24.07 (4.63)
Performance quoted in the investment report relates to Class A2 (USD) shares.* On 2 July 2014 Global Natural Resources Fund was launched.
Past performance is not a guide to future performance.
192
Global Natural Resources Fund
Portfolio as at 30 June 2019 (continued)
Number
of Securities
Market
Value
USD
% of
Net
Assets
Transferable securities and money market instruments admitted to an offi cial exchange listing and/or dealt on another regulated market, unless otherwise stated.
Equities 97.17%
Australia 11.37%
Consumer Staples 0.49%
13,164 Costa 37,569 0.49
Energy 3.93%
11,210 Beach Energy 15,564 0.20
54,658 Carnarvon Petroleum 22,900 0.30
19,239 Cooper Energy 7,217 0.09
11,067 Oil Search 54,865 0.72
19,427 Santos 96,446 1.27
3,998 Woodside Petroleum 102,478 1.35
299,470 3.93
Materials 6.95%
48,731 Bellevue Gold 23,834 0.31
15,309 BHP 391,110 5.15
22,152 Independence 73,161 0.96
18,169 South32 40,514 0.53
17,439 Xanadu Mines Rights - -
528,619 6.95
Canada 12.79%
Energy 2.58%
2,338 Canadian Natural Resources 62,510 0.82
4,277 Suncor Energy 133,882 1.76
196,392 2.58
Materials 10.21%
2,547 Agnico Eagle Mines 129,720 1.70
40,791 B2Gold 121,317 1.59
2,326 Endeavour Mining 37,715 0.50
594 Franco-Nevada 49,744 0.65
5,580 Hudbay Minerals 30,060 0.39
1,221 Kirkland Lake Gold 51,851 0.68
14,376 Lundin Mining 77,553 1.02
3,939 Nutrien 211,984 2.79
11,599 SEMAFO 44,416 0.58
18,844 Turquoise Hill Resources 23,238 0.31
777,598 10.21
Chile 1.02%
Materials 1.02%
6,628 Antofagasta 77,861 1.02
Denmark 2.15%
Industrials 2.15%
1,897 Vestas Wind Systems 163,770 2.15
Finland 6.54%
Energy 0.25%
562 Neste 19,130 0.25
Portfolio as at 30 June 2019 (continued)
Number
of Securities
Market
Value
USD
% of
Net
Assets
Materials 6.29%
16,468 Stora Enso 193,724 2.54
10,818 UPM-Kymmene 285,240 3.75
478,964 6.29
France 5.61%
Energy 5.61%
7,630 Total 426,854 5.61
Ireland 1.98%
Materials 1.98%
4,972 Smurfi t Kappa 150,735 1.98
Italy 2.04%
Energy 2.04%
9,378 ENI 155,536 2.04
Luxembourg 2.03%
Materials 2.03%
8,678 ArcelorMittal 154,723 2.03
Netherlands 5.34%
Energy 3.71%
3,378 Royal Dutch Shell 'A' 110,436 1.45
5,239 Royal Dutch Shell 'B' 171,794 2.26
282,230 3.71
Materials 1.63%
1,006 Koninklijke DSM 124,268 1.63
New Zealand 0.29%
Consumer Staples 0.29%
3,570 Synlait Milk 22,069 0.29
Norway 6.90%
Consumer Staples 2.50%
5,020 Mowi 116,955 1.54
1,681 Salmar 72,804 0.96
189,759 2.50
Energy 2.41%
9,304 Equinor 183,684 2.41
Materials 1.99%
42,391 Norsk Hydro 151,589 1.99
Sweden 1.62%
Energy 1.62%
3,967 Lundin Petroleum 123,255 1.62
United Kingdom 8.87%
Materials 8.87%
11,155 Anglo American 316,965 4.16
10,171 Mondi 231,205 3.04
2,058 Rio Tinto 127,375 1.67
675,545 8.87
193
Global Natural Resources Fund
Portfolio as at 30 June 2019 (continued)
Number
of Securities
Market
Value
USD
% of
Net
Assets
United States 28.62%
Consumer Staples 6.39%
5,323 Archer-Daniels-Midland 217,470 2.86
1,537 Bunge 86,157 1.13
2,292 Tyson Foods 'A' 182,925 2.40
486,552 6.39
Energy 9.01%
2,726 ConocoPhillips 167,922 2.21
842 EOG Resources 77,254 1.01
1,375 Exxon Mobil 104,761 1.38
2,694 Marathon Petroleum 147,577 1.94
4,802 Noble Energy 105,692 1.39
3,216 TechnipFMC 82,472 1.08
685,678 9.01
Industrials 0.88%
401 Deere 66,732 0.88
Materials 12.34%
1,078 Albemarle 75,379 0.99
758 Corteva 22,304 0.29
1,553 FMC 128,915 1.69
6,670 Freeport-McMoRan C & G 'B' 76,872 1.01
4,631 Mosaic 114,085 1.50
5,337 Newmont Goldcorp 204,219 2.68
2,078 Nucor 113,469 1.49
832 Vulcan Materials 113,227 1.49
2,524 Westrock 91,445 1.20
939,915 12.34
Investment in securities 7,398,497 97.17
Other net assets 215,385 2.83
Total net assets 7,613,882 100.00
Any diff erences in the percentage of Net Assets fi gures are the result of roundings.
Top ten changes in the securities portfolio for the year
from 1 July 2018 to 30 June 2019
Description of Securities Purchases Sales
USD USD
Canada
Goldcorp - 219,698
Nutrien - 229,102
Finland
Stora Enso 260,180 -
UPM-Kymmene 332,639 -
France
Total 480,966 -
Norway
Equinor 205,308 -
Sweden
Lundin Petroleum - 226,853
Switzerland
Glencore 228,843 497,585
United Kingdom
Mondi 229,248 -
Rio Tinto - 235,117
United States
Alcoa - 285,688
Archer-Daniels-Midland 278,895 -
ConocoPhillips 194,511 -
EOG Resources - 301,147
Exxon Mobil - 235,488
Hess - 220,222
Newmont Goldcorp 271,417 -
TechnipFMC 197,551 -
Zoetis - 253,633
194
Global Property Equities Fund
Investment Fund Managers
Guy Barnard and Tim Gibson
The fund returned 10.7% based on Class A2 US Dollar terms over the year under review, compared with the FTSE EPRA Nareit Developed Index which returned 7.7%.
Global equities saw signifi cant volatility over the year, with sharp declines at the end of 2018 driven by indications of slowing global growth combined with heightened geopolitical uncertainty. This was off set by a strong rally in the fi rst half of 2019 as investors reacted to a signifi cant shift in central bank policy. This caused bonds and credit markets to rally and the yield curve to fl atten as investors priced in interest rate cuts in the months ahead.
Global property stocks benefi ted from the decline in bond yields, marginally outperforming wider equity markets over the year. Importantly, the sector also gave investors a far less volatile journey, proving more defensive during the market selloff s in the fourth quarter of 2018 and again in May. At a regional level, Asia Pacifi c was the strongest performer, with Singapore real estate investment trusts (REITs) leading, boosted by a more measured supply outlook and falling yields driving demand for income. Likewise, Australian REITs benefi ted from the Reserve Bank of Australia cutting rates for the fi rst time in three years. US REITs also made gains, but saw ongoing divergence at a sector level, with weakness from malls and hotels and strength in industrial/logistics, healthcare and housing. European stocks lagged, with weakness in the retail sector and political risks in the German residential sector dragging the region lower.
The fund outperformed its index over the year. At a sector level, an overweight stance to industrial/logistics stocks globally was a key driver of performance, with Goodman, Rexford Industrial Realty REIT and Prologis all among the top contributors. Our underweight to retail also helped, most notably through an absence of Unibail-Rodamco-Westfi eld in Europe, which fell sharply. Elsewhere, net lease Essential Properties Realty Trust and manufactured housing Sun Communities and Equity Lifestyle Properties all performed strongly in the US, as did Ayala Land in the Philippines. Detractors included Berlin-focused landlords Deutsche Wohnen and ADO Properties, which fell following the surprise decision by the Berlin senate to impose a fi ve-year rent freeze on apartment rents. Shangri-La in Hong Kong and Rayonier also lagged.
From a positioning perspective, we continue to maintain a relatively neutral country stance, preferring to focus on bottom up stock selection to drive returns. Our focus remains on those parts of the market and companies where we see the potential for continued cash fl ow and dividend growth. We remain wary of ’value’ trades where we see ongoing structural shifts, which are putting pressure on demand for physical real estate and, therefore, rents. This had led us to be very selective in our holdings of retail landlords; a trend we re-emphasised over the year with the sale of Simon Property in the US, Hammerson in the UK and Chinese landlord Hang Lung Properties.
We remain overweight global logistics developers, which are benefi ting from the growth of e-commerce. We added new positions in market leader Prologis in the US, along with Nippon Prologis REIT and Industrial & Infrastructure Fund Investment in Japan, to existing holdings including Goodman in Australia and VGP and SEGRO in Europe. We also added cold storage owner/operator Americold Realty Trust. We remain constructive on alternative parts of the market and built on positions in the gaming sector in the US. However, we took profi ts in the data centre and cell tower companies, after strong share price performance, selling NextDC in Australia and Equinix and American Tower in the US.
We see further upside in companies off ering aff ordable and fl exible housing in growing markets, such as Germany, the Philippines, and burgeoning cities within the US. Stocks in this area include Ayala Land in Asia, Sun Communities, American Homes 4 Rent and Camden Property Trust in the US and ADO Properties in Europe. Elsewhere, trading was based on relative return expectations, driven by changes in share price or fundamentals.
Looking ahead, although capital growth has moderated, we believe the underlying fundamentals for the listed property sector remain robust. Recent moves lower in bond yields and interest rate expectations should provide further investor demand for physical real estate, a real asset with an attractive and growing income stream. However, the spread of returns at a property level is likely to widen in the years ahead given both cyclical and structural forces, meaning it is increasingly important to be selective.
Against this backdrop, we will continue to play to our strengths, reducing high level risks and focusing on bottom-up stock selection to drive returns through a concentrated, high conviction portfolio. The focus remains on companies capable of growing income and dividends and those best placed to benefi t from technological change, which is changing consumer behaviour and altering the needs and uses for real estate. Also, as market-wide growth slows, we place greater emphasis on quality assets, balance sheets and management teams; in our experience, the value of these factors always comes to the fore at this point in the cycle.
Investment report for the year from 1 July 2018 to 30 June 2019
195
Global Property Equities Fund
Statement of Net Assets
As at 30 June 2019Notes USD
Assets
Investment in securities at market value 3 484,281,271 Cash at bank 12 11,840,024 Interest and dividends receivable 3 2,203,856 Subscriptions receivable 7,792,735 Receivable for investments sold 1,691,651 Unrealised gain on contracts for diff erence 3 -Unrealised gain on futures contracts 3 -Unrealised gain on forward foreign exchange contracts 3 511,709 Purchased option contracts at market value 3 -Swap contracts at market value 3 -Other assets 168,271 Management fee rebate -Total assets 508,489,517
Liabilities
Bank overdraft 12 1,780,732 Payable for investments purchased 1,974,131 Taxes and expenses payable 1,805,641 Redemptions payable 1,338,900 Unrealised loss on contracts for diff erence 3 -Unrealised loss on futures contracts 3 -Unrealised loss on forward foreign exchange contracts 3 5,570 Sold option contracts at market value 3 -Swap contracts at market value 3 -Dividends payable to shareholders 454,032 Interest and dividends payable on CFD -Other liabilities -Total liabilities 7,359,006
Net assets at the end of the year 501,130,511
Statement of Operations
For the year from 1 July 2018 to 30 June 2019Notes USD
Income
Dividend income (net of withholding tax) 3 10,332,037 Bond interest income 3 -Income from collective investment schemes 3 -Derivative income 3 -Interest received on contracts for diff erence 3 -Other income 3, 13 268,306 Total income 10,600,343
Expenses
Management fees 6, 14 4,058,171 Administration, registrar and transfer agent fees 6 236,239 Custodian fees 6 68,924 Shareholder servicing fees and distribution fees 6, 14 1,341,327 Depositary fees 6 23,698 Other expenses 6 170,052 Derivative expenses 3 5,000 Interest paid on contracts for diff erence 3 -Performance fees 6 482,957 Taxation ("taxe d'abonnement") 7 152,552 Total expenses 6,538,920
Net income from investments 4,061,423
Net realised gain/(loss)
Net realised gain on investment securities 3 9,960,575 Net realised gain/loss on contracts for diff erence 3 -Net realised gain/loss on futures contracts 3 -Net realised gain/loss on swap contracts 3 -Net realised gain/loss on options contracts 3 -Net realised loss on forward foreign exchange contracts 3 (1,107,958) Net realised loss on currency exchange (280,140)
Net realised gain on investments and derivatives 8,572,477
Net change in unrealised appreciation/
depreciation
Change in net unrealised appreciation/depreciation on investments
3 22,483,387
Change in net unrealised appreciation/depreciation on contracts for diff erence
3 -
Change in net unrealised appreciation/depreciation on futures contracts
3 -
Change in net unrealised appreciation/depreciation on swap contracts
3 -
Change in net unrealised appreciation/depreciation on options contracts
3 -
Change in net unrealised appreciation/depreciation on forward foreign exchange contracts
3 438,757
Change in net unrealised appreciation/depreciation on currency exchange
14,616
Change in unrealised appreciation/depreciation on investments and derivatives
22,936,760
Net increase in assets as a result of operations 35,570,660
The accompanying notes form an integral part of these fi nancial statements.
196
Global Property Equities Fund
Statement of Changes in Net Assets
For the year from 1 July 2018 to 30 June 2019Notes USD Notes USD
Net assets at the beginning of the year 365,651,092 Proceeds from shares issued 286,683,716 Net income from investments 4,061,423 Payments for shares redeemed (187,014,741) Net realised gain on investments and derivatives 8,572,477 Net equalisation (paid)/received 10 1,479,420 Change in unrealised appreciation/depreciation on investments and derivatives
22,936,760 Dividend distributions 11 (1,239,636)
Net assets at the end of the year 501,130,511
Share Transactions
For the year from 1 July 2018 to 30 June 2019A2
(EUR)
A2
(GBP)
A2
(USD)
A2 HCHF
(CHF)
A2 HEUR
(EUR)
A3
(SGD)
Shares outstanding at the beginning of the year 996,535.42 388,189.49 8,537,374.88 68,957.71 656,956.11 128.82Shares issued during the year 1,050,550.79 160,393.11 3,935,149.94 14,804.72 570,091.65 3.81Shares redeemed during the year (453,991.24) (62,882.42) (4,371,799.10) (14,205.71) (589,042.80) -Shares outstanding at the end of the year 1,593,094.97 485,700.18 8,100,725.72 69,556.72 638,004.96 132.63
Equivalent to a net asset value per share of: 20.90 18.71 23.80 13.84 14.20 23.87
A3
(USD)
F2
(USD)
F3
(USD)
G2
(USD)
G2 HCHF
(CHF)
G2 HEUR
(EUR)
Shares outstanding at the beginning of the year 1,296,770.14 3,833.73 127.22 331,350.48 223,200.00 11,648.27Shares issued during the year 242,880.28 7,191.51 3.76 1,818,758.38 56,400.00 34,308.41Shares redeemed during the year (281,978.14) (705.89) - (35,790.00) (119,000.00) -Shares outstanding at the end of the year 1,257,672.28 10,319.35 130.98 2,114,318.86 160,600.00 45,956.68
Equivalent to a net asset value per share of: 19.09 24.90 23.15 14.61 13.17 13.53
H2
(EUR)
H2
(GBP)
H2
(USD)
H2 HCHF
(CHF)
H2 HEUR
(EUR)
H3
(EUR)
Shares outstanding at the beginning of the year 43,015.86 8,826.51 580,639.87 190,426.13 87,001.43 126.11Shares issued during the year 64,332.52 284,366.50 255,722.28 - 31,584.58 3.72Shares redeemed during the year (25,097.10) (48,308.80) (216,792.05) (146,455.87) (33,146.93) -Shares outstanding at the end of the year 82,251.28 244,884.21 619,570.10 43,970.26 85,439.08 129.83
Equivalent to a net asset value per share of: 18.32 16.19 15.64 12.25 14.27 22.84
H3
(USD)
I2
(USD)
I2 HEUR
(EUR)
I3
(EUR)
I3
(USD)
X2
(USD)
Shares outstanding at the beginning of the year 976,871.99 3,234,453.17 124,015.79 21,324.00 - 74,511.87Shares issued during the year 39,437.77 2,573,025.79 1,063,768.47 82,542.91 912,252.84 73,527.18Shares redeemed during the year (320,195.55) (1,965,866.24) (106,579.78) (40,984.80) - (27,452.97)Shares outstanding at the end of the year 696,114.21 3,841,612.72 1,081,204.48 62,882.11 912,252.84 120,586.08
Equivalent to a net asset value per share of: 13.81 27.10 16.99 149.95 25.38 22.10
TER is calculated in accordance with SFAMA (Swiss Funds and Asset Management Association).The amounts earned in relation to performance fees for the year are shown in note 6 to the fi nancial statements.The TER includes performance fees as at 30 June 2019.* The share class launched in the period and the rate is annualised.
198
Performance history (unaudited)
Fund & Benchmark 1 year to 1 year to 1 year to 1 year to 1 year to
30 Jun 15 30 Jun 16 30 Jun 17 30 Jun 18 30 Jun 19
% % % % %
Global Property Equities Fund A2 (USD) (2.32) 12.06 2.07 8.97 10.70 FTSE EPRA Nareit Developed Index (0.36) 11.58 0.21 5.64 7.68
Performance quoted in the investment report relates to Class A2 (USD) shares.
Past performance is not a guide to future performance.
Global Property Equities Fund
199
Global Property Equities Fund
Portfolio as at 30 June 2019 (continued)
Number
of Securities
Market
Value
USD
% of
Net
Assets
Transferable securities and money market instruments admitted to an offi cial exchange listing and/or dealt on another regulated market, unless otherwise stated.
Equities 96.64%
Australia 5.55%
Financials 5.55%
522,784 Cromwell Property 423,397 0.08
869,194 Dexus Property REIT 7,944,583 1.59
1,827,342 Goodman 19,425,062 3.88
27,793,042 5.55
Belgium 1.41%
Financials 1.41%
85,000 VGP 7,053,064 1.41
Canada 1.25%
Financials 1.25%
173,121 Allied Properties REIT 6,240,058 1.25
France 1.67%
Financials 1.67%
56,500 Gecina 8,363,541 1.67
Germany 5.41%
Financials 5.41%
105,000 ADO Properties 4,298,938 0.86
895,000 Aroundtown 7,302,178 1.46
294,379 Deutsche Wohnen 10,750,787 2.14
215,000 Instone Real Estate 4,769,597 0.95
27,121,500 5.41
Hong Kong 5.52%
Financials 5.52%
1,184,500 Link REIT 14,567,465 2.91
769,392 Sun Hung Kai Properties 13,071,322 2.61
27,638,787 5.52
Ireland 0.36%
Financials 0.36%
875,000 Green REIT 1,794,710 0.36
Japan 10.67%
Financials 10.67%
948 Daiwa Offi ce Investment REIT 6,803,785 1.36
4,776 Industrial & Infrastructure Fund Investment 5,938,149 1.18
6,566 MCUBS MidCity Investment 6,186,753 1.23
573,200 Mitsui Fudosan 13,899,867 2.78
3,040 Nippon Prologis REIT 7,010,828 1.40
6,157 Nomura Real Estate Master Fund 9,460,442 1.89
* In the case of derivative instruments, Market Value refers to the net profi t or loss and is used in the calculation of the Fund NAV.
** Applicable for authorised funds per the SFC (Securities and Futures Commission) guidelines.Any diff erences in the percentage of Net Assets fi gures are the result of roundings.
The fund returned 5.6% based on Class A2 US Dollar terms, over the period under review, compared to the benchmark MSCI World Net
Return USD return of 5.7%.
With global stock markets having delivered strong returns, we are receiving lots of questions about valuation levels. There is also much
nervousness around global politics and slowing economic growth. How could stock markets go higher from these levels? While it is true
that valuations are less attractive than they were at the end of 2018, we believe there is reason to be constructive. With the US Federal
Reserve signalling a move towards looser monetary policy we see potential for signifi cant valuation upside in companies that are growing.
We have a disciplined approach to portfolio construction, and our position sizing is determined by the most attractive combination of
growth, cash fl ow, returns and valuation. We are investing in companies where we see signifi cant upside potential over the next several
years. We are fortunate to have a world class risk team at Janus Henderson, and we are closely monitoring our risk profi le. Liquidity is an
important element of risk control, and we have a very strong liquidity profi le despite our mid-cap skew – we could liquidate 80% of the
portfolio in one day using only 20% of the average daily volume.
We always like to remind our investors of the need to diff erentiate between valuation and value. We still see much value in companies that
are growing. Our sustainability-focused investment framework is designed to help us identify companies exposed to long term secular
trends. Additionally, we believe our multi-thematic approach enables us to construct a well-diversifi ed portfolio.
Investment report for the period from 29 May 2019 to 30 June 2019
203
Global Sustainable Equity Fund
Statement of Net Assets
As at 30 June 2019Notes USD
Assets
Investment in securities at market value 3 5,174,664 Cash at bank 12 124,043 Interest and dividends receivable 3 2,211 Subscriptions receivable 12,000 Receivable for investments sold -Unrealised gain on contracts for diff erence 3 -Unrealised gain on futures contracts 3 -Unrealised gain on forward foreign exchange contracts 3 73 Purchased option contracts at market value 3 -Swap contracts at market value 3 -Other assets -Management fee rebate -Total assets 5,312,991
Liabilities
Bank overdraft 12 -Payable for investments purchased 9,921 Taxes and expenses payable 738 Redemptions payable -Unrealised loss on contracts for diff erence 3 -Unrealised loss on futures contracts 3 -Unrealised loss on forward foreign exchange contracts 3 -Sold option contracts at market value 3 -Swap contracts at market value 3 -Dividends payable to shareholders -Interest and dividends payable on CFD -Other liabilities -Total liabilities 10,659
Net assets at the end of the period 5,302,332
Statement of Operations
For the period from 29 May 2019 to 30 June 2019Notes USD
Income
Dividend income (net of withholding tax) 3 6,550 Bond interest income 3 -Income from collective investment schemes 3 -Derivative income 3 -Interest received on contracts for diff erence 3 -Other income 3, 13 -Total income 6,550
Expenses
Management fees 6, 14 23 Administration, registrar and transfer agent fees 6 118 Custodian fees 6 178 Shareholder servicing fees and distribution fees 6, 14 6 Depositary fees 6 138 Other expenses 6 158 Derivative expenses 3 -Interest paid on contracts for diff erence 3 -Performance fees 6 -Taxation ("taxe d'abonnement") 7 132 Total expenses 753
Net income from investments 5,797
Net realised gain/(loss)
Net realised gain/loss on investment securities 3 -Net realised gain/loss on contracts for diff erence 3 -Net realised gain/loss on futures contracts 3 -Net realised gain/loss on swap contracts 3 -Net realised gain/loss on options contracts 3 -Net realised gain on forward foreign exchange contracts 3 14,596 Net realised loss on currency exchange (11,744)
Net realised gain on investments and derivatives 2,852
Net change in unrealised appreciation/
depreciation
Change in net unrealised appreciation/depreciation on investments
3 281,620
Change in net unrealised appreciation/depreciation on contracts for diff erence
3 -
Change in net unrealised appreciation/depreciation on futures contracts
3 -
Change in net unrealised appreciation/depreciation on swap contracts
3 -
Change in net unrealised appreciation/depreciation on options contracts
3 -
Change in net unrealised appreciation/depreciation on forward foreign exchange contracts
3 73
Change in net unrealised appreciation/depreciation on currency exchange
(19)
Change in unrealised appreciation/depreciation on investments and derivatives
281,674
Net increase in assets as a result of operations 290,323
The accompanying notes form an integral part of these fi nancial statements.
204
Global Sustainable Equity Fund
Statement of Changes in Net Assets
For the period from 29 May 2019 to 30 June 2019Notes USD Notes USD
Net assets at the beginning of the period - Proceeds from shares issued 5,012,009 Net income from investments 5,797 Payments for shares redeemed -Net realised gain on investments and derivatives 2,852 Net equalisation (paid)/received 10 -Change in unrealised appreciation/depreciation on investments and derivatives
281,674 Dividend distributions 11 -
Net assets at the end of the period 5,302,332
Share Transactions
For the period from 29 May 2019 to 30 June 2019A2
(EUR)
A2
(SGD)
A2
(USD)
A2 HSGD
(SGD)
GU2
(USD)
H2
(EUR)
Shares outstanding at the beginning of the period - - - - - -Shares issued during the period 250.00 250.00 1,395.04 250.00 250.00 250.00Shares redeemed during the period - - - - - -Shares outstanding at the end of the period 250.00 250.00 1,395.04 250.00 250.00 250.00
Equivalent to a net asset value per share of: 10.34 10.35 10.56 10.56 10.58 10.35
H2
(SGD)
H2
(USD)
H2 HSGD
(SGD)
IU2
(EUR)
IU2
(GBP)
IU2
(SGD)
Shares outstanding at the beginning of the period - - - - - -Shares issued during the period 250.00 250.00 250.00 250.00 250.00 250.00Shares redeemed during the period - - - - - -Shares outstanding at the end of the period 250.00 250.00 250.00 250.00 250.00 250.00
Equivalent to a net asset value per share of: 10.36 10.57 10.57 10.35 10.52 10.36
IU2
(USD)
IU2 HSGD
(SGD)
Z2
(USD)
Shares outstanding at the beginning of the period - - -Shares issued during the period 250.00 250.00 496,763.30Shares redeemed during the period - - -Shares outstanding at the end of the period 250.00 250.00 496,763.30
Equivalent to a net asset value per share of: 10.57 10.57 10.58
TER is calculated in accordance with SFAMA (Swiss Funds and Asset Management Association).* The share class launched in the period and the rate is annualised.There were no performance fees on the fund as at 30 June 2019.
206
Global Sustainable Equity Fund
Performance history (unaudited)
Fund & Benchmark Since launch to
30 Jun 19
%
Global Sustainable Equity Fund* A2 (USD) 5.60 MSCI World Net Return USD 5.66
Performance quoted in the investment report relates to Class A2 (USD) shares.* on 29 May 2019, the Global Sustainable Equity Fund was launched.
Past performance is not a guide to future performance.
207
Global Sustainable Equity Fund
Portfolio as at 30 June 2019 (continued)
Number
of Securities
Market
Value
USD
% of
Net
Assets
Transferable securities and money market instruments admitted to an offi cial exchange listing and/or dealt on another regulated market, unless otherwise stated.
Equities 97.59%
Australia 0.77%
Consumer Staples 0.58%
Food Products 0.58%
10,800 Costa 30,822 0.58
Health Care 0.19%
Health Care Equipment & Supplies 0.19%
2,500 Nanosonics 9,983 0.19
Canada 5.64%
Consumer Discretionary 2.54%
Textiles, Apparel & Luxury Goods 2.54%
3,500 Gildan Activewear 134,815 2.54
Financials 1.91%
Insurance 1.91%
1,100 Intact Financial 101,375 1.91
Utilities 1.19%
Independent Power and Renewable Electricity Producers 1.19%
Investment in securities and derivatives 5,174,737 97.59
Other net assets 127,595 2.41
Total net assets 5,302,332 100.00
* In the case of derivative instruments, Market Value refers to the net profi t or loss and is used in the calculation of the Fund NAV.
Any diff erences in the percentage of Net Assets fi gures are the result of roundings.
209
Global Sustainable Equity Fund
Top ten changes in the securities portfolio for the period
from 29 May 2019 to 30 June 2019
Description of Securities Purchases Sales
USD USD
Canada
Gildan Activewear 126,637 -
Japan
Nintendo 141,528 -
Netherlands
ASML 136,596 -
United States
Adobe 165,743 -
Autodesk 148,746 -
Humana 132,998 -
Microsoft 250,697 -
Progressive 138,721 -
Salesforce.com 145,766 -
Walt Disney 158,232 -
210
Global Technology Fund
Investment Fund Managers
Alison Porter, Graeme Clark and Richard Clode.
The fund returned 6.3% based on Class A2 US Dollar terms over the year under review, compared with the MSCI All Countries World IT
Index which returned 7.2%.
Xilinx contributed to performance positively. Xilinx are a leader in FPGAs (chips that can be programmed after manufacturing). Speed of
initial 5G deployments, increasing use cases in antennas, base stations and in data centre led Xilinx to deliver robust performance. We sold
the holding, as we felt much of 5G-related upside was priced in while much of Huawei-related downside was not.
ServiceNow, a long term holding in our Process Automation theme, outperformed. ServiceNow is a leading platform for businesses looking
to automate elements of their business operations. ServiceNow started by helping customers to automate information technology (IT)
service desks and has used the same technology platform to expand into other areas of the IT department, as well as into other areas of
business operations (including human resources, customer services and fi nance).
Universal Display was a positive contributor. Universal Display has a strong patent portfolio that is essential to organic light-emitting diode
(OLED) product design as well as supplying OLED materials. Visibility and timing of adoption remains volatile in the company, but we
remain of the belief that the long term growth outlook is favourable and their patents are key to OLED adoption.
IAC performed strongly. IAC owns a portfolio of internet-related assets, including Match Group (which owns dating app Tinder, among
others) and ANGI Homeservices (digital marketplace for home services), both are publicly listed. IAC have a good track record of realising
value for shareholders via their holding structure. We held the stock on the basis that the market underappreciated this.
Activision Blizzard was a detractor from performance given investor concerns around near-term demand and earnings growth potential
given disruption from new game genres like Fortnite and PUBG. This coincided with uncertainty around China gaming approvals. Nvidia
was one of our largest detractors. We have long been believers in the strength of the Nvidia franchise. It has a fi rst mover advantage in
artifi cial intelligence and machine learning, and while we fully expect its shares to decline as competition increases (from Xilinx and Google,
among others) we believe that it has among the highest long term growth rates in the semiconductor sector. In December, we were hurt by
a downgrade to future growth estimates based on a hard reset of crypto-related graphics card inventory. We had anticipated this, but it was
of greater magnitude than we expected. This was further exacerbated in 2019 by Chinese trade tensions and Huawei being blacklisted by
the US.
Nokia underperformed after an underwhelming set of results and near-term outlook, despite its continued 5G investment appeal. Our
investment case in Nokia is predicated on a consolidated industry, a better industry backdrop, a solid management team and reasonable
valuation. As such, we remain positive on the investment thesis, but will continue to monitor execution. Flextronics detracted from
performance as the company exited its transformational partnership with Nike. The development of this manufacturing relationship was a
pivotal part of our investment thesis – as an example of how the company could diversity into more stable verticals such versus traditional
consumer electronics. The failure to execute on this was a material shortfall and such, we exited the position. We rotated out of Naspers
into Tencent as the discount between the two narrowed. Naspers is a South African holding company that owns a signifi cant stake in
Tencent.
After a period of strong performance over the last three years, semiconductors fi nally began an inventory correction spurred by a slowdown
in data centre expenditure, Chinese demand, autos and slower than expected iPhone production. Mid-way through the year, we made
the decision to reduce our semis exposure, particularly in memory, semi cap equipment and analog-related names. Key sales here were
Micron, Western Digital, and Applied Materials. We used the period of weakness to initiate a position in ASML, which we view as a unique
franchise. We also sold out of Intel and used the proceeds to add to WorldPay (payments), where conviction is higher.
We initiated a position in Fiserv following its intention to merge with First Data. We remain positive on the revenue and cost synergies
associated with the deal. We also initiated a position in Intuit – a market leader in small and medium business accounting software as
well as consumer tax software – as we see continued opportunity for both revenue and earnings growth from what we think will be a high
quality compounding story. We reduced Apple over the year, as we became less positive versus its historic positioning given lengthening
replacement rates and sluggish services growth. We maintain a position given signifi cant shareholder returns, valuation support and long
term outlook.
While we expect the macroeconomic drivers of volatility to continue short term, we remain constructively biased on the long term outlook
for technology equities; we believe secular drivers for the sector remain intact and should not be impacted materially by the greater global
outlook. We continue to believe that technology will take shares from the wider market, driven by demographics and Moore‘s Law (which
suggests the number of transistors in a circuit doubles around every two years). We continue to see a rich vein of technology stocks that
we can buy in the middle ground that provide attractive risk/reward and growth/valuation combinations. We remain focused on quality
companies that benefi t from powerful secular themes at a reasonable price.
Investment report for the year from 1 July 2018 to 30 June 2019
211
Global Technology Fund
The accompanying notes form an integral part of these fi nancial statements.
Statement of Net Assets
As at 30 June 2019Notes USD
Assets
Investment in securities at market value 3 2,704,386,344 Cash at bank 12 56,922,147 Interest and dividends receivable 3 1,180,233 Subscriptions receivable 9,267,498 Receivable for investments sold 5,983,468 Unrealised gain on contracts for diff erence 3 -Unrealised gain on futures contracts 3 -Unrealised gain on forward foreign exchange contracts 3 2,472,283 Purchased option contracts at market value 3 -Swap contracts at market value 3 -Other assets -Management fee rebate -Total assets 2,780,211,973
Liabilities
Bank overdraft 12 170,223 Payable for investments purchased 14,437,526 Taxes and expenses payable 8,742,787 Redemptions payable 6,345,895 Unrealised loss on contracts for diff erence 3 -Unrealised loss on futures contracts 3 -Unrealised loss on forward foreign exchange contracts 3 14,813 Sold option contracts at market value 3 -Swap contracts at market value 3 -Dividends payable to shareholders -Interest and dividends payable on CFD -Other liabilities -Total liabilities 29,711,244
Net assets at the end of the year 2,750,500,729
Statement of Operations
For the year from 1 July 2018 to 30 June 2019Notes USD
Income
Dividend income (net of withholding tax) 3 18,676,792 Bond interest income 3 -Income from collective investment schemes 3 -Derivative income 3 4,849 Interest received on contracts for diff erence 3 -Other income 3, 13 1,569,990 Total income 20,251,631
Expenses
Management fees 6, 14 30,325,930 Administration, registrar and transfer agent fees 6 2,045,054 Custodian fees 6 174,130 Shareholder servicing fees and distribution fees 6, 14 11,958,214 Depositary fees 6 185,535 Other expenses 6 1,906,161 Derivative expenses 3 -Interest paid on contracts for diff erence 3 -Performance fees 6 -Taxation ("taxe d'abonnement") 7 1,283,188 Total expenses 47,878,212
Net expense from investments (27,626,581)
Net realised gain/(loss)
Net realised gain on investment securities 3 322,373,712 Net realised gain/loss on contracts for diff erence 3 -Net realised gain/loss on futures contracts 3 -Net realised gain/loss on swap contracts 3 -Net realised gain/loss on options contracts 3 -Net realised loss on forward foreign exchange contracts 3 (5,782,741) Net realised loss on currency exchange (390,542)
Net realised gain on investments and derivatives 316,200,429
Net change in unrealised appreciation/
depreciation
Change in net unrealised appreciation/depreciation on investments
3 (133,984,734)
Change in net unrealised appreciation/depreciation on contracts for diff erence
3 -
Change in net unrealised appreciation/depreciation on futures contracts
3 -
Change in net unrealised appreciation/depreciation on swap contracts
3 -
Change in net unrealised appreciation/depreciation on options contracts
3 -
Change in net unrealised appreciation/depreciation on forward foreign exchange contracts
3 2,654,476
Change in net unrealised appreciation/depreciation on currency exchange
18,307
Change in unrealised appreciation/depreciation on investments and derivatives
(131,311,951)
Net increase in assets as a result of operations 157,261,897
212
Global Technology Fund
Statement of Changes in Net Assets
For the year from 1 July 2018 to 30 June 2019Notes USD Notes USD
Net assets at the beginning of the year 3,056,407,742 Proceeds from shares issued 794,500,593 Net expense from investments (27,626,581) Payments for shares redeemed (1,257,669,475) Net realised gain on investments and derivatives 316,200,429 Net equalisation (paid)/received 10 (28) Change in unrealised appreciation/depreciation on investments and derivatives
(131,311,951) Dividend distributions 11 -
Net assets at the end of the year 2,750,500,729
Share Transactions
For the year from 1 July 2018 to 30 June 2019A1
(USD)
A2
(EUR)
A2
(GBP)
A2
(SGD)
A2
(USD)
A2 HCHF
(CHF)
Shares outstanding at the beginning of the year 1,694,657.92 2,744,328.62 164,584.01 10,996.49 19,840,047.86 133,213.02Shares issued during the year 255,275.31 745,140.70 47,288.01 16,979.48 4,472,621.87 11,681.61Shares redeemed during the year (506,893.98) (959,846.28) (68,694.56) (11,982.52) (8,343,293.13) (30,703.51)Shares outstanding at the end of the year 1,443,039.25 2,529,623.04 143,177.46 15,993.45 15,969,376.60 114,191.12
Equivalent to a net asset value per share of: 92.31 81.10 72.65 90.41 92.35 182.04
A2 HCNH
(CNH)
A2 HSGD
(SGD)
C2
(USD)
F1
(USD)
F2
(USD)
G2
(USD)
Shares outstanding at the beginning of the year 50.31 265,447.68 11,529.32 62.50 54,338.23 291,270.77Shares issued during the year - 68,347.00 5,191.48 - 32,577.18 5,136,914.61Shares redeemed during the year - (40,186.91) (3,627.18) - (19,588.67) (677,840.53)Shares outstanding at the end of the year 50.31 293,607.77 13,093.62 62.50 67,326.74 4,750,344.85
Equivalent to a net asset value per share of: 568.20 225.64 25.99 53.26 51.69 22.56
H1
(EUR)
H1
(USD)
H2
(EUR)
H2
(GBP)
H2
(USD)
H2 HCHF
(CHF)
Shares outstanding at the beginning of the year 5,181.67 2,571,093.91 1,582,702.75 154,564.97 14,278,487.56 3,513,286.57*Shares issued during the year 8,146.81 282,910.91 490,749.74 76,533.98 1,995,507.01 135,650.19Shares redeemed during the year (3,812.00) (823,940.83) (620,949.11) (54,843.83) (4,011,578.76) (835,336.66)Shares outstanding at the end of the year 9,516.48 2,030,063.99 1,452,503.38 176,255.12 12,262,415.81 2,813,600.10
Equivalent to a net asset value per share of: 25.53 21.19 27.53 32.07 25.15 17.14
H2 HEUR
(EUR)
I1
(GBP)
I1
(USD)
I2
(USD)
I2 HEUR
(EUR)
X2
(EUR)
Shares outstanding at the beginning of the year 163,715.52 35,089.61 211,628.04 2,816,587.67 477,693.93 71,742.35Shares issued during the year 75,060.86 46.26 41,877.11 743,087.12 549,931.49 23,086.52Shares redeemed during the year (155,046.41) (6,440.00) (46,119.82) (1,913,364.85) (461,668.11) (26,478.77)Shares outstanding at the end of the year 83,729.97 28,695.87 207,385.33 1,646,309.94 565,957.31 68,350.10
Equivalent to a net asset value per share of: 44.56 79.27 101.18 101.49 52.47 73.82
X2
(USD)
Shares outstanding at the beginning of the year 374,911.03Shares issued during the year 76,282.43Shares redeemed during the year (155,769.60)Shares outstanding at the end of the year 295,423.86
Equivalent to a net asset value per share of: 84.09
TER is calculated in accordance with SFAMA (Swiss Funds and Asset Management Association).There were no performance fees on the fund as at 30 June 2019.
214
Performance history (unaudited)
Fund & Benchmark 1 year to 1 year to 1 year to 1 year to 1 year to
30 Jun 15 30 Jun 16 30 Jun 17 30 Jun 18 30 Jun 19
% % % % %
Global Technology Fund A2 (USD) 5.67 (0.87) 36.31 26.38 6.32 MSCI All Countries World IT Index 8.66 1.19 35.53 26.11 7.20
Performance quoted in the investment report relates to Class A2 (USD) shares.
Past performance is not a guide to future performance.
Global Technology Fund
215
Portfolio as at 30 June 2019 (continued)
Number
of Securities
Market
Value
USD
% of
Net
Assets
Transferable securities and money market instruments admitted to an offi cial exchange listing and/or dealt on another regulated market, unless otherwise stated.
* In the case of derivative instruments, Market Value refers to the net profi t or loss and is used in the calculation of the Fund NAV.
** Applicable for authorised funds per the SFC (Securities Financing Commission) guidelines.Any diff erences in the percentage of Net Assets fi gures are the result of roundings.
Global Technology Fund
217
Global Technology Fund
Top ten changes in the securities portfolio for the year
from 1 July 2018 to 30 June 2019
Description of Securities Purchases Sales
USD USD
China
Alibaba - 55,451,716
Tencent 120,568,981 -
Netherlands
ASML 64,942,703 -
NXP Semiconductors 31,015,130 37,044,301
South Africa
Naspers 'N' - 70,440,382
United States
Amphenol 'A' 47,426,658 -
Apple - 120,793,825
Applied Materials 41,484,188 -
Autodesk - 30,897,958
Electronic Arts - 39,858,315
Fiserv 41,028,295 -
Intel - 103,420,668
Intuit 42,851,187 -
Microsoft - 100,116,249
Netfl ix 42,949,595 -
Red Hat - 30,663,248
Uber Technologies 33,762,735 -
Worldpay 39,191,554 -
Xilinx - 50,507,562
218
Japanese Smaller Companies Fund
Investment Fund Manager
Yun Young Lee
The fund fell 11.4% based on Class A2 US Dollar terms over the year under review, compared with the Russell/Nomura Small Cap Index
which fell 12.4%.
The Japanese equity market dropped over the year, mainly due to concerns over the US/China trade war, poor Chinese economic
indicators, and weakening earnings momentum for Japanese companies. Despite the bearish market sentiment, share buybacks by
Japanese corporations hit record highs in fi rst half of 2019. In the Japanese small cap market, domestic demand-related sectors such as
pharmaceuticals, communications, and land transportation outperformed. Banks were the worst performers due to Japan’s loose monetary
policy.
The major positive contributors were Mitsui E&S (shipbuilding and plant engineering), Septeni (internet ad agency), Nissin Electric
(electrical equipment and OLED), Ines (information technology services), and Clarion (car navigation and self-driving). Mitsui E&S aimed for
a business turnaround after signifi cant losses in its plant engineering business. We felt its share price was undervalued compared with the
holding value of the listed subsidiary, which was highly appreciated by the market. We sold all our shares when it reached our target price.
Septeni has what we consider superior know-how in the internet ad business. We increased our position when the company struggled with
a one-off impact from intense competition. Its share price rose after the leading Japanese advertisement company, Dentsu, recognised its
competitive edge and announced a business tie-up with Septeni in the internet ad fi eld.
Nissin Electric has a competitive edge in electrical equipment for all Japanese electric companies and 100% global market share for ion
doping equipment, which is used to manufacture smartphone OLED displays. The share prices surged from a low valuation after the market
crash in December 2018 due to an earnings outlook that was better than expected coupled with a steady demand for electrical equipment
and high-margin ion doping equipment. We sold out of the position as it reached our target price. Ines, which has a high market share in
software for the welfare services of local governments, announced large-sized share buybacks to improve return on equity (ROE). Ines’s
management has maintained a strong stance to improve ROE for several years.
We investigated Clarion’s self-driving technology and consider valuation to be undervalued. Its share price jumped after Faurecia in France
announced a tender off er for Clarion. We participated in the tender off er and sold all our shares.
The major negative contributors were Aiful (consumer fi nance), Cookpad (internet recipe site operator), IDOM (used car dealer), Pioneer
(car navigation), and TOA (marine civil engineering). Although Aiful’s cash outfl ow has gradually decreased due to its Kabarai payment
(a repayment of excessive interest charges), the pace was below expectations. In addition, its consumer fi nance business in Thailand
reported poor performance. However, Aiful is rapidly increasing its share in Japan’s consumer fi nance market, which is now dominated by
three players, including Aiful. We believe Aiful is underappreciated by the market and think it will be able to increase shareholder returns
after the Kabarai payment had been made. Cookpad’s share price dropped due to a rise in personnel costs, which were used to enhance
research & development functions. We continue to highly value its franchise of recipe sites and its potential for further monetisation both
in Japan and overseas markets. IDOM reported weak earnings results due to a rise in price competition; however, earnings are gradually
bottoming out, and we consider the risk return profi le at this price level to be extremely positive. We sold out of our position in Pioneer
during the year, as our thesis on the company has changed after multiple meetings with management. TOA posted poor quarterly results
last year. However, its order backlogs are accumulating, and profi tability is improving. We think TOA is undervalued by the market, and
thereby increased our position during the year.
Other major positions we increased during the year included GMO Financial (currency and cryptocurrency trading), Saint Marc
(restaurants), and Life (supermarket). We believe all three companies are undervalued compared to their intrinsic values. On the other
hand, major positions we reduced were Central Glass (chemicals), Kadokawa Industries (internet), Katakura (real estate), and Nippon Soda
(chemicals). We reduced these positions as their values approached our target price levels.
New purchases included Chudenko (electrical engineering work), Sakata Inx (Ink for plastic containers), Shochiku (movie studio and
cinema complex operator), CKD (pneumatic equipment), Disco (semiconductor manufacturing equipment), and SCREEN (semiconductor
manufacturing equipment), as we believe these companies are underappreciated by the market.
We believe in the long term turnaround story of the Japanese market. Japan ROE improved from 4.4% in 2011 (Abenomics year 1) to
10.0% in 2018 via the end of defl ation, the resumption of a productivity-enhancing capital expenditure cycle, a corporate tax cut, and major
initiatives on corporate governance reform. We expect Japanese ROE to expand further to the levels of its global peers, with potentially
expanding price to book value in the next fi ve to seven years. We continue to concentrate our fund on high conviction ideas based on our
bottom up approach and intensive management meetings. Valuation discipline and the avoidance of high expectation stocks have also been
cornerstones of our strategy.
We’ve continued to see a signifi cant positive shift in corporate culture since Prime Minister Shinzo Abe’s introduction of the corporate
governance code in 2015. Additionally, corporate reform is being boosted by Japanese companies’ increasingly large cash piles. Investors
are demanding more action on corporate governance and shareholder returns, with a record number of companies receiving shareholder
proposals ahead of annual meetings this year. Buybacks hit a record high in the fi rst half of 2019. We have confi dence in improving
corporate governance and believe this could reward shareholders.
Investment report for the year from 1 July 2018 to 30 June 2019
219
Japanese Smaller Companies Fund
The accompanying notes form an integral part of these fi nancial statements.
Statement of Net Assets
As at 30 June 2019Notes JPY
Assets
Investment in securities at market value 3 28,980,300,500 Cash at bank 12 570,252,003 Interest and dividends receivable 3 34,060,413 Subscriptions receivable 90,437,094 Receivable for investments sold 223,671,239 Unrealised gain on contracts for diff erence 3 -Unrealised gain on futures contracts 3 -Unrealised gain on forward foreign exchange contracts 3 26,254,596 Purchased option contracts at market value 3 -Swap contracts at market value 3 -Other assets -Management fee rebate -Total assets 29,924,975,845
Liabilities
Bank overdraft 12 19,063,159 Payable for investments purchased 112,381,711 Taxes and expenses payable 94,334,050 Redemptions payable 41,972,998 Unrealised loss on contracts for diff erence 3 -Unrealised loss on futures contracts 3 -Unrealised loss on forward foreign exchange contracts 3 7,605,257 Sold option contracts at market value 3 -Swap contracts at market value 3 -Dividends payable to shareholders -Interest and dividends payable on CFD -Other liabilities -Total liabilities 275,357,175
Net assets at the end of the year 29,649,618,670
Statement of Operations
For the year from 1 July 2018 to 30 June 2019Notes JPY
Income
Dividend income (net of withholding tax) 3 681,531,614 Bond interest income 3 -Income from collective investment schemes 3 -Derivative income 3 -Interest received on contracts for diff erence 3 -Other income 3, 13 51,586 Total income 681,583,200
Expenses
Management fees 6, 14 432,964,031 Administration, registrar and transfer agent fees 6 17,730,880 Custodian fees 6 5,828,071 Shareholder servicing fees and distribution fees 6, 14 72,772,721 Depositary fees 6 2,865,885 Other expenses 6 20,781,392 Derivative expenses 3 965,079 Interest paid on contracts for diff erence 3 -Performance fees 6 -Taxation ("taxe d'abonnement") 7 9,185,980 Total expenses 563,094,039
Net income from investments 118,489,161
Net realised gain/(loss)
Net realised loss on investment securities 3 (1,498,309,559) Net realised gain/loss on contracts for diff erence 3 -Net realised gain/loss on futures contracts 3 -Net realised gain/loss on swap contracts 3 -Net realised gain/loss on options contracts 3 -Net realised loss on forward foreign exchange contracts 3 (11,403,488) Net realised loss on currency exchange (985,041)
Net realised loss on investments and derivatives (1,510,698,088)
Net change in unrealised appreciation/
depreciation
Change in net unrealised appreciation/depreciation on investments
3 (5,949,879,214)
Change in net unrealised appreciation/depreciation on contracts for diff erence
3 -
Change in net unrealised appreciation/depreciation on futures contracts
3 -
Change in net unrealised appreciation/depreciation on swap contracts
3 -
Change in net unrealised appreciation/depreciation on options contracts
3 -
Change in net unrealised appreciation/depreciation on forward foreign exchange contracts
3 61,413,739
Change in net unrealised appreciation/depreciation on currency exchange
120,794
Change in unrealised appreciation/depreciation on investments and derivatives
(5,888,344,681)
Net decrease in assets as a result of operations (7,280,553,608)
220
Japanese Smaller Companies Fund
Statement of Changes in Net Assets
For the year from 1 July 2018 to 30 June 2019Notes JPY Notes JPY
Net assets at the beginning of the year 68,703,701,203 Proceeds from shares issued 5,733,506,010 Net income from investments 118,489,161 Payments for shares redeemed (37,461,161,048) Net realised loss on investments and derivatives (1,510,698,088) Net equalisation (paid)/received 10 (45,873,887) Change in unrealised appreciation/depreciation on investments and derivatives
(5,888,344,681) Dividend distributions 11 -
Net assets at the end of the year 29,649,618,670
Share Transactions
For the year from 1 July 2018 to 30 June 2019A2
(JPY)
A2
(USD)
A2 HEUR
(EUR)
A2 HSGD
(SGD)
A2 HUSD
(USD)
C2
(JPY)
Shares outstanding at the beginning of the year 600,658.64 1,623,280.29 141,657.63 50.00 619,290.51 671.34Shares issued during the year 212,313.97 260,444.15 1,886.99 - 53,166.22 -Shares redeemed during the year (418,024.85) (798,805.54) (129,804.87) - (510,690.58) -Shares outstanding at the end of the year 394,947.76 1,084,918.90 13,739.75 50.00 161,766.15 671.34
Equivalent to a net asset value per share of: 5,732.39 53.11 46.65 46.01 37.11 4,593.24
F2
(USD)
F2 HUSD
(USD)
H2
(JPY)
H2
(USD)
H2 HEUR
(EUR)
H2 HUSD
(USD)
Shares outstanding at the beginning of the year 3,458.20 29,594.27 361.00 174,308.47 910.00 550.00Shares issued during the year - 8,268.98 11,878.58 38,534.15 5,250.00 -Shares redeemed during the year (3,408.20) (9,406.37) - (120,297.13) (1,460.00) (500.00)Shares outstanding at the end of the year 50.00 28,456.88 12,239.58 92,545.49 4,700.00 50.00
Equivalent to a net asset value per share of: 49.78 48.46 4,530.87 31.31 40.77 42.63
I2
(JPY)
I2
(SGD)
I2
(USD)
I2 HEUR
(EUR)
I2 HSGD
(SGD)
I2 HUSD
(USD)
Shares outstanding at the beginning of the year 4,554,406.55 206,022.01 487,490.45 432,860.77 1,906,016.30 73,236.94Shares issued during the year 320,023.15 280.23 28,629.12 6,939.46 60,482.12 9,251.00Shares redeemed during the year (2,246,850.32) (206,252.24) (375,190.86) (239,516.69) (1,261,855.81) (58,483.99)Shares outstanding at the end of the year 2,627,579.38 50.00 140,928.71 200,283.54 704,642.61 24,003.95
Equivalent to a net asset value per share of: 5,277.88 63.05 57.40 46.68 61.14 57.27
M2
(JPY)
X2
(USD)
X2 HEUR
(EUR)
Z2
(JPY)
Shares outstanding at the beginning of the year 311,820.13 140,632.56 356.68 59.50Shares issued during the year - 3,361.63 - -Shares redeemed during the year (311,820.13) (58,459.47) - -Shares outstanding at the end of the year - 85,534.72 356.68 59.50
Equivalent to a net asset value per share of: n/a 48.70 41.64 5,971.68
TER is calculated in accordance with SFAMA (Swiss Funds and Asset Management Association).There were no performance fees on the fund as at 30 June 2019.
222
Japanese Smaller Companies Fund
Performance history (unaudited)
Fund & Benchmark 1 year to 1 year to 1 year to 1 year to 1 year to
30 Jun 15 30 Jun 16 30 Jun 17 30 Jun 18 30 Jun 19
% % % % %
Japanese Smaller Companies Fund A2 (USD) 10.59 8.04 26.38 5.71 (11.44) Russell/Nomura Small Cap Index* 12.27 (0.69) 23.37 15.62 (12.35)
Performance quoted in the investment report relates to Class A2 (USD) shares.* On 1 November 2015, Japanese Smaller Companies Fund changed its benchmark from Tokyo SE Second Section Index to Russell/Nomura Small Cap Index.
Past performance is not a guide to future performance.
223
Japanese Smaller Companies Fund
Portfolio as at 30 June 2019 (continued)
Number
of Securities
Market
Value
JPY
% of
Net
Assets
Transferable securities and money market instruments admitted to an offi cial exchange listing and/or dealt on another regulated market, unless otherwise stated.
Equities 97.75%
Japan 97.75%
Communication Services 7.77%
3,429,000 Cookpad 1,052,703,000 3.55
4,900 Feedforce 5,635,000 0.02
2,024,700 Septeni 702,570,900 2.37
44,500 Shochiku 541,565,000 1.83
2,302,473,900 7.77
Consumer Discretionary 13.10%
566,600 Fujitsu General 968,602,700 3.27
2,245,600 IDOM 648,978,400 2.19
69,300 Kura Sushi 318,433,500 1.07
154,900 St Marc 355,495,500 1.20
189,900 Tachi-S 262,346,850 0.88
1,112,500 Yonex 686,412,500 2.32
477,800 Yorozu 644,552,200 2.17
3,884,821,650 13.10
Consumer Staples 5.49%
342,000 Life 740,943,000 2.50
572,800 Ministop 887,840,000 2.99
1,628,783,000 5.49
Energy 0.95%
1,069,900 Fuji Oil 281,383,700 0.95
Financials 5.08%
3,990,300 Aiful 879,861,150 2.96
990,100 GMO Financial 627,723,400 2.12
1,507,584,550 5.08
Industrials 34.84%
456,300 Central Glass 1,090,785,150 3.68
140,600 Chudenko 314,592,500 1.06
64,200 CKD 70,010,100 0.24
621,000 Futaba 871,573,500 2.94
347,600 Hisaka Works 302,933,400 1.02
205,200 Katakura Industries 264,092,400 0.89
394,600 Meidensha 663,519,900 2.24
137,700 Nippon Yusen 237,945,600 0.80
146,300 OKK 110,675,950 0.37
1,915,900 Relia 2,420,739,650 8.17
62,000 Sohgo Security Services 308,140,000 1.04
873,200 TOA 1,418,950,000 4.79
2,071,700 Toppan Forms 1,754,729,900 5.92
216,800 Toyo Denki Seizo 284,766,800 0.96
59,700 Zuiko 212,681,250 0.72
10,326,136,100 34.84
Portfolio as at 30 June 2019 (continued)
Number
of Securities
Market
Value
JPY
% of
Net
Assets
Information Technology 10.22%
136,300 Denki Kogyo 433,434,000 1.46
8,600 Disco 151,962,000 0.51
322,600 Ines 369,538,300 1.25
1,693,400 Nichicon 1,485,958,500 5.02
60,400 SCREEN 271,196,000 0.91
93,000 Ulvac 317,362,500 1.07
3,029,451,300 10.22
Materials 17.69%
256,900 Fuso Chemical 549,380,650 1.85
950,200 Neturen 821,447,900 2.77
776,400 Nippon Soda 2,117,631,000 7.15
294,000 Sakata INX 296,793,000 1.00
83,300 Taiyo 270,516,750 0.91
788,400 Tokyo Steel Manufacturing 641,757,600 2.16
Buy USD 5,983,801 : Sell JPY 648,095,921 July 2019
(4,691,155) (0.02)
Buy USD 80,832 : Sell JPY 8,698,867 July 2019
(7,491) -
18,649,339 0.06
Investment in securities and derivatives
(cost JPY 35,444,481,502**)
28,998,949,839 97.81
Other net assets 650,668,831 2.19
Total net assets 29,649,618,670 100.00
* In the case of derivative instruments, Market Value refers to the net profi t or loss and is used in the calculation of the Fund NAV.
** Applicable for authorised funds per the SFC (Securities and Futures Commission) guidelines.Any diff erences in the percentage of Net Assets fi gures are the result of roundings.
Top ten changes in the securities portfolio for the year
from 1 July 2018 to 30 June 2019
Description of Securities Purchases Sales
JPY JPY
Japan
Aiful - 2,196,462,432
Asics - 1,948,072,659
Central Glass - 1,431,682,290
Chudenko 322,205,645 -
GMO Financial 446,082,955 -
Isetan Mitsukoshi - 2,841,195,191
Kura Sushi 328,215,741 -
Mitsui Engineering & Shipbuilding - 4,145,200,900
Nichicon 725,103,222 -
Nippon Yusen 800,196,403 1,971,633,049
Nissin Electric 469,260,329 -
North Pacifi c Bank - 1,862,865,254
Pioneer - 2,077,962,471
Ricoh - 3,074,088,128
Sakata INX 351,114,472 -
Shochiku 512,567,812 -
Sohgo Security Services 976,231,441 -
TOA 529,276,217 -
Tokyo Steel Manufacturing - 2,911,571,951
225
Pan European Alpha Fund
Investment Fund Managers
John Bennett and Robert Schramm-Fuchs
The fund fell 3.7% based on Class A2 Euro terms over the year under review.
The year under review was characterised by a narrative of synchronised global growth and ageing bull markets in most leading equity
and bond markets. Perhaps this was suffi cient to blur certain lead indicators, but, courtesy of intensifying trade wars; a rapidly weakening
Chinese yuan; a bear market for Chinese equities; profi t warnings in the European autos and logistics sectors; and political instability in
Europe, markets have been dealt a reality check. Equity markets staged a strong rebound from the lows seen in December 2018, the basis
of which has been renewed monetary accommodation by central banks; the US Federal Reserve, the European Central Bank and the
People’s Bank of China have sought to reassure markets and/or stimulate their respective economies. This has encouraged the view that
a rebound in both economies and corporate earnings will follow in the second half of 2019. Pulling the other way are bond markets, which
have signifi ed a continuing disinfl ationary environment—and so the tug of war between bonds and equities continues. As for European
equities, one thing going for the region is that it remains deeply out of favour among investors. Consequently, should we see a repeat of last
year’s sell-off , the fund should be able to capitalise on opportunities.
On the long side, healthcare and consumer staples were positive contributors, while performance was held back by our industrial and
materials sector allocations.
At a stock level, international brewer Carlsberg was the top performer, as its new management’s scrutiny of costs and focus on core
markets should help the company achieve margins similar to those of its competitors. We booked some profi t on the holding. Swedish
telecommunications operator Tele2 was another positive contributor, as the company made further progress slimming down the group
following good fi rst quarter results. Strong performers also included German information technology (IT) stocks Dialog Semiconductor and
SAP; the latter was boosted by recent equity market strength and accommodative central banks. Its shares also reacted positively to the
announcement that activist investor Elliott had taken a stake in the company. Finally, the fund benefi ted from its holding in Norwegian fi sh
farming leader Mowi, as the company reported fi rst quarter results in line with its recent trading update. A slightly increased global supply
outlook and steady salmon price augers well for profi t growth in the second quarter.
United Internet detracted from performance and we disposed of the holding, refl ecting our concerns about the competitive landscape
changes in the German mobile market. Performance was adversely aff ected by auto component holding Autoliv, as US plans to impose a
tariff on Mexican imports drove the sector lower. From the same sector, Nokian Renkaat also lagged; we have cut our exposure to these
names. Poor performers also included industrial name Trelleborg, which we sold as part of a reduction in our industrials exposure.
On the short book, our positions in the IT space added to returns, as a number of our semiconductor companies posted profi t warnings for
the third quarter, following several autos semi supplier second quarter misses.
The fund’s index options hedging strategy off ered the expected degree of protection, as the fund’s net exposure automatically declined the
more markets fell. The strategy’s primary aim is to enhance our ability to allocate capital in market drawdowns while maintaining at least the
same level of protection as through futures, at similar annual cost, but with a potentially higher participation in rebound rallies.
On the long side, we rely on high conviction ideas in the healthcare, autos, industrials, materials and semiconductor sectors to express our
top-down views. Key activity over the year included the introduction Ericsson, Akzo Nobel and SBM Off shore. We reversed course on our
short STMicroelectronics and Infi neon Technologies holdings and topped up the fund’s largest holding, LafargeHolcim.
Disposals should be seen in the context of our deliberate move to a more concentrated portfolio on both sides of the book. This, in turn,
refl ects increased conviction at the stock-specifi c level. We completed our exit from banks by disposing of ABN Amro Bank, Bankinter,
DNB and Commerzbank, and we sold Bayer and Smurfi t Kappa. Finally, we booked profi ts on long positions in Puma, Smith & Nephew
and Balfour Beatty.
At the time of writing, the short book is concentrated on stocks with high corporate leverage, poor capital allocation track records and richly
valued defensives where we see signifi cant potential for earnings disappointment. During the year, we added positions in the utilities and
consumer discretionary space while taking profi ts in the autos sector.
In terms of overall positioning at the end of the fi scal year, our exposure stood at approximately 67% net and 130% gross, respectively. As
always, the hedge book via options remains in place to off er protection in case of sharp market drawdowns, especially with binary event risk
from trade negotiations or wider war in the Middle East.
Our business is about the rate of change. Often, the greatest gains are realised when things go from bad to less bad. In our view, the pain
trade remains up from here, and probably in certain cyclical stocks. We continue to overlay our bottom-up stock picks with the options
hedging strategy to be prepared, if and when setbacks or external shocks hit.
Investment report for the year from 1 July 2018 to 30 June 2019
226
Pan European Alpha Fund
The accompanying notes form an integral part of these fi nancial statements.
Statement of Net Assets
As at 30 June 2019Notes EUR
Assets
Investment in securities at market value 3 410,812,874 Cash at bank 12 88,090,231 Interest and dividends receivable 3 43,205 Subscriptions receivable 2,666,731 Receivable for investments sold 2,646 Unrealised gain on contracts for diff erence 3 3,016,517 Unrealised gain on futures contracts 3 -Unrealised gain on forward foreign exchange contracts 3 277,725 Purchased option contracts at market value 3 3,188,687 Swap contracts at market value 3 -Other assets 668,503 Management fee rebate -Total assets 508,767,119
Liabilities
Bank overdraft 12 262,210 Payable for investments purchased 1,739,300 Taxes and expenses payable 1,842,299 Redemptions payable 1,972,726 Unrealised loss on contracts for diff erence 3 901,451 Unrealised loss on futures contracts 3 -Unrealised loss on forward foreign exchange contracts 3 1,687,949 Sold option contracts at market value 3 2,538,924 Swap contracts at market value 3 -Dividends payable to shareholders -Interest and dividends payable on CFD 285,110 Other liabilities -Total liabilities 11,229,969
Net assets at the end of the year 497,537,150
Statement of Operations
For the year from 1 July 2018 to 30 June 2019Notes EUR
Income
Dividend income (net of withholding tax) 3 8,253,870 Bond interest income 3 -Income from collective investment schemes 3 -Derivative income 3 4,309,288 Interest received on contracts for diff erence 3 1,026,226 Other income 3, 13 107,491 Total income 13,696,875
Expenses
Management fees 6, 14 7,360,058 Administration, registrar and transfer agent fees 6 366,667 Custodian fees 6 62,431 Shareholder servicing fees and distribution fees 6, 14 1,710,694 Depositary fees 6 53,255 Other expenses 6 897,503 Derivative expenses 3 5,935,374 Interest paid on contracts for diff erence 3 2,450,726 Performance fees 6 -Taxation ("taxe d'abonnement") 7 194,475 Total expenses 19,031,183
Net expense from investments (5,334,308)
Net realised gain/(loss)
Net realised loss on investment securities 3 (21,789,476)Net realised gain on contracts for diff erence 3 2,531,566 Net realised loss on futures contracts 3 (5,128,218)Net realised gain/loss on swap contracts 3 -Net realised loss on options contracts 3 (847,422)Net realised gain on forward foreign exchange contracts 3 3,097,803 Net realised gain on currency exchange 60,694
Net realised loss on investments and derivatives (22,075,053)
Net change in unrealised appreciation/
depreciation
Change in net unrealised appreciation/depreciation on investments
3 7,816,244
Change in net unrealised appreciation/depreciation on contracts for diff erence
3 (2,637,406)
Change in net unrealised appreciation/depreciation on futures contracts
3 (3,244,645)
Change in net unrealised appreciation/depreciation on swap contracts
3 -
Change in net unrealised appreciation/depreciation on options contracts
3 (1,084,871)
Change in net unrealised appreciation/depreciation on forward foreign exchange contracts
3 (2,694,159)
Change in net unrealised appreciation/depreciation on currency exchange
2,133
Change in unrealised appreciation/depreciation on investments and derivatives
(1,842,704)
Net decrease in assets as a result of operations (29,252,065)
227
Pan European Alpha Fund
Statement of Changes in Net Assets
For the year from 1 July 2018 to 30 June 2019Notes EUR Notes EUR
Net assets at the beginning of the year 952,248,518 Proceeds from shares issued 398,589,998 Net expense from investments (5,334,308) Payments for shares redeemed (824,052,307) Net realised loss on investments and derivatives (22,075,053) Net equalisation (paid)/received 10 3,006 Change in unrealised appreciation/depreciation on investments and derivatives
(1,842,704) Dividend distributions 11 -
Net assets at the end of the year 497,537,150
Share Transactions
For the year from 1 July 2018 to 30 June 2019A1
(EUR)
A2
(EUR)
A2 HGBP
(GBP)
A2 HSGD
(SGD)
A2 HUSD
(USD)
F2 HUSD
(USD)
Shares outstanding at the beginning of the year 1,036,980.48 15,536,974.92 174,300.75 128,690.90 2,431,869.81 250.00Shares issued during the year 59,738.96 2,235,801.25 2,000.00 14,638.40 799,745.54 -Shares redeemed during the year (398,644.33) (9,331,923.45) (124,555.90) (13,650.11) (1,408,452.54) -Shares outstanding at the end of the year 698,075.11 8,440,852.72 51,744.85 129,679.19 1,823,162.81 250.00
Equivalent to a net asset value per share of: 14.95 14.98 10.30 10.76 13.97 10.09
GU2
(EUR)
H1
(EUR)
H1 HGBP
(GBP)
H2
(EUR)
H2 HUSD
(USD)
I2
(EUR)
Shares outstanding at the beginning of the year - 1,086,985.15 250.00 450,625.94 250.00 31,542,861.00Shares issued during the year 4,756,584.66 515,605.00 0.90 192,659.27 - 16,279,257.48Shares redeemed during the year (4,756,413.54) (349,194.89) - (335,132.70) - (33,654,880.43)Shares outstanding at the end of the year 171.12 1,253,395.26 250.90 308,152.51 250.00 14,167,238.05
Equivalent to a net asset value per share of: 14.58 10.60 10.48 10.46 10.18 16.25
I2 HGBP
(GBP)
I2 HUSD
(USD)
Q2
(EUR)
Q2 HGBP
(GBP)
Q2 HUSD
(USD)
S2
(EUR)
Shares outstanding at the beginning of the year 38,562.22 882,833.61 423,070.90 3,354,858.57 361,155.19 3,700.00Shares issued during the year - 545,074.27 65,248.11 29,685.68 17,212.53 -Shares redeemed during the year (7,835.22) (374,995.20) (184,664.77) (483,191.49) (179,622.87) -Shares outstanding at the end of the year 30,727.00 1,052,912.68 303,654.24 2,901,352.76 198,744.85 3,700.00
Equivalent to a net asset value per share of: 10.81 12.97 15.51 10.65 16.28 13.63
S2 HSGD
(SGD)
S2 HUSD
(USD)
X2
(EUR)
X2 HUSD
(USD)
Z2
(EUR)
Shares outstanding at the beginning of the year 19,994.37 20,354.34 3,257,025.27 593,404.48 -Shares issued during the year - - 125,772.00 913.48 25,939.17Shares redeemed during the year (18,807.04) (0.01) (1,175,586.56) (216,407.20) -Shares outstanding at the end of the year 1,187.33 20,354.33 2,207,210.71 377,910.76 25,939.17
Equivalent to a net asset value per share of: 14.09 13.24 14.21 11.22 9.96
TER is calculated in accordance with SFAMA (Swiss Funds and Asset Management Association).* The share class launched in the year and the rate is annualised.There were no performance fees on the fund as at 30 June 2019.
229
Performance history (unaudited)
Fund & Benchmark 1 year to 1 year to 1 year to 1 year to 1 year to
30 Jun 15 30 Jun 16 30 Jun 17 30 Jun 18 30 Jun 19
% % % % %
Pan European Alpha Fund A2 (EUR) 3.44 (3.65) 6.02 (0.77) (3.67) Euro Base Rate (Euro Main Refi nancing Rate) (1.30) 0.04 - - -
Performance quoted in the investment report relates to Class A2 (EUR) shares.
Past performance is not a guide to future performance.
Pan European Alpha Fund
230
Pan European Alpha Fund
Portfolio as at 30 June 2019 (continued)
Number
of Securities
Market
Value
EUR
% of
Net
Assets
Transferable securities and money market instruments admitted to an offi cial exchange listing and/or dealt on another regulated market, unless otherwise stated.
# In the case of derivative instruments, Commitment refers to the gross position taken by the Fund.
* In the case of derivative instruments, Market Value refers to the net profi t or loss and is used in the calculation of the Fund NAV.
** Applicable for authorised funds per the SFC (Securities Financing Commission) guidelines.Any diff erences in the percentage of Net Assets fi gures are the result of roundings.
Portfolio as at 30 June 2019 (continued)
233
Pan European Alpha Fund
Top ten changes in the securities portfolio for the year
from 1 July 2018 to 30 June 2019
Description of Securities Purchases Sales
EUR EUR
Belgium
KBC Bank 0.00% CD 26/11/2018 25,026,138 -
Canada
Royal Bank of Canada 0.00% 08/05/2019 20,020,293 -
Crédit Industriel et Commercial 0.00% 30/11/2018 25,025,303 -
Crédit Industriel et Commercial 000% 03/08/2018 - 25,000,000
Ireland
Smurfi t Kappa - 38,357,656
Japan
Mitsubishi UFJ Trust and Banking 0.00% 02/11/2018
25,009,045 25,000,000
Mitsubishi UFJ Trust and Banking 0.00% 02/10/2018
25,009,337 25,000,000
Netherlands
ABN AMRO 0.00% 04/01/2019 25,034,499 -
Switzerland
Credit Suisse 000% 11/10/2018 - 25,000,000
UBS 0.00% 26/10/2018 25,024,301 25,000,000
United Kindowm
Barclays 0.00% 13/08/2018 - 25,000,000
United States
Citibank 0.00% 04/01/2019 25,023,661 -
Citibank 0.00% 04/10/2018 25,018,256 25,000,000
234
Pan European Property Equities Fund
Investment Fund Managers
Guy Barnard & Nicolas Scherf
The fund returned 2.0% based on Class A2 Euro terms over the year under review, compared with the FTSE EPRA Nareit Developed
Europe Capped Index Net TRI which fell 2.0%.
Global and European equities saw signifi cant volatility over the year, with sharp declines at the end of 2018 driven by indications of slowing
global growth combined with heightened geopolitical uncertainty. This was off set by a strong rally in the fi rst half of 2019 as investors
reacted to a signifi cant shift in central bank policy. This caused bonds and credit markets to rally and the yield curve to fl atten as investors
priced in interest rate cuts in the months ahead.
In addition to the broader macroeconomic backdrop of slowing European growth and political uncertainty, the listed property sector had its
own specifi c issues to contend with. Retail property faces structural challenges from the growth of e-commerce, the UK property market
continues to bear the brunt of ongoing Brexit uncertainty, and more recently, in Berlin, a populist backlash against residential landlords led
the Berlin state government to propose a fi ve-year rent freeze for landlords. Stocks exposed to these areas saw declines over the year,
leading the sector to underperform wider markets. However, we also saw several areas where continued strong real estate fundamentals
led to positive share price performance. Nordic markets, Spain, the German commercial sector, and areas of structural growth, such as
industrial/logistics and alternatives, all performed well.
The fund outperformed its benchmark over the year. From a sector allocation standpoint, our underweight position in retail names across
Europe added signifi cant value, most notably through Unibail-Rodamco-Westfi eld. Industrial/logistics landlords outperformed, and our
holdings in VGP and SEGRO benefi ted. Finnish residential landlord Kojamo made strong gains following its initial public off ering last year.
Wihlborgs Fastigheter and Fastighets AB Balder ‘B’ in Sweden were also noteworthy performers. Elsewhere, Green REIT in Ireland was
boosted by a strategic review and a decision to seek bids for the portfolio. In the UK, London-focused Helical, as well as Safestore and
Unite performed well. Detractors included the absence of Swiss names along with our holdings in Berlin-focused residential landlords
Deutsche Wohnen and ADO Properties, which fell sharply following the surprise rent-control decision in Berlin.
From a positioning perspective, while the lower rate environment is generally supportive for property assets, weaker economic growth and
structural change have led us to place greater emphasis on the sustainability of underlying income streams and the strength of a company’s
balance sheets.
We remain cautious on retail property, as we believe the growth of e-commerce and low consumer confi dence in Europe will continue to put
pressure on rents and values. We further reduced exposure to this area over the year, selling our holding in Hammerson REIT and reducing
Unibail-Rodamco-Westfi eld. Our core overweights have been constructed around areas of structural growth, such as industrial/logistics (we
added to VGP and SEGRO), rental residential (we added Hembla in Sweden), healthcare (we switched from Assura in the UK to Aedifi ca
on the continent), self-storage and student accommodation. We believe these sectors will continue to deliver solid rental growth and provide
an attractive return to shareholders in the form of valuation growth and dividend yields. In addition, we see several markets off ering cyclical
upswings we can capitalise on; these include Scandinavian, Spanish, German and French offi ces. New names in this area include TLG
Immobilien and CA Immobilien Anlagen. Overall, the number of holdings was reduced by one to 32.
While European growth looks to be slowing and political uncertainty remains, we believe the underlying fundamentals for the listed property
sector remain robust. Recent moves lower in bond yields and interest rate expectations should provide further investor demand for physical
real estate, a real asset with an attractive and growing income stream. However, the spread of returns at a property level is likely to widen in
the years ahead given both cyclical and structural forces, meaning it is increasingly important to be selective.
Listed real estate stocks in Europe continue to trade at a discount to net asset value, meaning it remains cheaper for investors to buy
property through shares rather than physical real estate. We continue to fi nd opportunities to buy companies off ering attractive growth
stories at discounted valuations that do not appear to refl ect the inherent value of their assets. More widely, the robust income streams of
the European property equities sector are currently off ering a dividend yield of over 4%, which we forecast to grow by about 4% per annum
for the next two years.
Investment report for the year from 1 July 2018 to 30 June 2019
235
Pan European Property Equities Fund
The accompanying notes form an integral part of these fi nancial statements.
Statement of Net Assets
As at 30 June 2019 Notes EUR
Assets
Investment in securities at market value 3 345,609,508 Cash at bank 12 6,229,759 Interest and dividends receivable 3 1,493,681 Subscriptions receivable 1,765,825 Receivable for investments sold 215,637 Unrealised gain on contracts for diff erence 3 -Unrealised gain on futures contracts 3 -Unrealised gain on forward foreign exchange contracts 3 3,028 Purchased option contracts at market value 3 -Swap contracts at market value 3 -Other assets 569,571 Management fee rebate -Total assets 355,887,009
Liabilities
Bank overdraft 12 1,760,478 Payable for investments purchased 2,587,474 Taxes and expenses payable 1,410,190 Redemptions payable 2,075,461 Unrealised loss on contracts for diff erence 3 -Unrealised loss on futures contracts 3 -Unrealised loss on forward foreign exchange contracts 3 111,218 Sold option contracts at market value 3 -Swap contracts at market value 3 -Dividends payable to shareholders 937,923 Interest and dividends payable on CFD -Other liabilities -Total liabilities 8,882,744
Net assets at the end of the year 347,004,265
Statement of Operations
For the year from 1 July 2018 to 30 June 2019Notes EUR
Income
Dividend income (net of withholding tax) 3 9,781,368 Bond interest income 3 -Income from collective investment schemes 3 -Derivative income 3 1,959 Interest received on contracts for diff erence 3 -Other income 3, 13 141,260 Total income 9,924,587
Expenses
Management fees 6, 14 4,164,505 Administration, registrar and transfer agent fees 6 267,226 Custodian fees 6 46,038 Shareholder servicing fees and distribution fees 6, 14 1,571,236 Depositary fees 6 25,443 Other expenses 6 247,417 Derivative expenses 3 -Interest paid on contracts for diff erence 3 -Performance fees 6 303,880 Taxation ("taxe d'abonnement") 7 159,032 Total expenses 6,784,777
Net income from investments 3,139,810
Net realised gain/(loss)
Net realised loss on investment securities 3 (1,940,911) Net realised gain/loss on contracts for diff erence 3 -Net realised gain/loss on futures contracts 3 -Net realised gain/loss on swap contracts 3 -Net realised gain/loss on options contracts 3 -Net realised gain on forward foreign exchange contracts 3 681,229 Net realised loss on currency exchange (41,783)
Net realised loss on investments and derivatives (1,301,465)
Net change in unrealised appreciation/
depreciation
Change in net unrealised appreciation/depreciation on investments
3 3,995,187
Change in net unrealised appreciation/depreciation on contracts for diff erence
3 -
Change in net unrealised appreciation/depreciation on futures contracts
3 -
Change in net unrealised appreciation/depreciation on swap contracts
3 -
Change in net unrealised appreciation/depreciation on options contracts
3 -
Change in net unrealised appreciation/depreciation on forward foreign exchange contracts
3 (85,185)
Change in net unrealised appreciation/depreciation on currency exchange
2,051
Change in unrealised appreciation/depreciation on investments and derivatives
3,912,053
Net increase in assets as a result of operations 5,750,398
236
Pan European Property Equities Fund
Statement of Changes in Net Assets
For the year from 1 July 2018 to 30 June 2019Notes EUR Notes EUR
Net assets at the beginning of the year 412,514,008 Proceeds from shares issued 139,901,617 Net income from investments 3,139,810 Payments for shares redeemed (209,732,690) Net realised loss on investments and derivatives (1,301,465) Net equalisation (paid)/received 10 (491,145) Change in unrealised appreciation/depreciation on investments and derivatives
3,912,053 Dividend distributions 11 (937,923)
Net assets at the end of the year 347,004,265
Share Transactions
For the year from 1 July 2018 to 30 June 2019A2
(EUR)
A2
(SGD)
A2 HCNH
(CNH)
A2 HUSD
(USD)
A3
(EUR)
G2
(EUR)
Shares outstanding at the beginning of the year 6,285,146.92 62.50 60.37 378,215.12 477,859.32 255,823.39Shares issued during the year 833,903.55 - - 392,039.28 179,307.19 12,000.00Shares redeemed during the year (2,649,082.15) - - (497,534.41) (149,401.39) (101,752.40)Shares outstanding at the end of the year 4,469,968.32 62.50 60.37 272,719.99 507,765.12 166,070.99
Equivalent to a net asset value per share of: 48.68 49.23 325.39 33.61 37.79 35.11
H2
(EUR)
H2 HUSD
(USD)
H3
(EUR)
I2
(EUR)
I2 HUSD
(USD)
X2
(EUR)
Shares outstanding at the beginning of the year 351,907.74 83.00 485,190.16 698,533.40 11,230.29 134,187.21Shares issued during the year 172,643.80 - 213,669.72 1,197,390.14 - 30,036.50Shares redeemed during the year (99,492.61) - (275,537.43) (847,579.48) (2,060.00) (39,425.23)Shares outstanding at the end of the year 425,058.93 83.00 423,322.45 1,048,344.06 9,170.29 124,798.48
Equivalent to a net asset value per share of: 42.34 34.13 34.82 55.04 31.26 45.00
TER is calculated in accordance with SFAMA (Swiss Funds and Asset Management Association).The amounts earned in relation to performance fees for the year are shown in note 6 to the fi nancial statements.The TER includes performance fees as at 30 June 2019.
Performance history (unaudited)
Fund & Benchmark 1 year to 1 year to 1 year to 1 year to 1 year to
30 Jun 15 30 Jun 16 30 Jun 17 30 Jun 18 30 Jun 19
% % % % %
Pan European Property Equities Fund A2 (EUR) 26.14 0.69 7.00 16.96 1.99 FTSE EPRA Nareit Developed Europe Capped Index Net TRI 21.54 0.30 5.54 8.89 (2.01)
Performance quoted in the investment report relates to Class A2 (EUR) shares.
Past performance is not a guide to future performance.
238
Pan European Property Equities Fund
Portfolio as at 30 June 2019 (continued)
Number
of Securities
Market
Value
EUR
% of
Net
Assets
Transferable securities and money market instruments admitted to an offi cial exchange listing and/or dealt on another regulated market, unless otherwise stated.
* In the case of derivative instruments, Market Value refers to the net profi t or loss and is used in the calculation of the Fund NAV.
** Applicable for authorised funds per the SFC (Securities and Futures Commission) guidelines.Any diff erences in the percentage of Net Assets fi gures are the result of roundings.
240
Pan European Smaller Companies Fund
Investment Fund Managers
Ollie Beckett and Rory Stokes
The fund fell 6.5% based on Class A2 Euro terms over the year under review, compared with the Euromoney Smaller Companies Pan
European Index which fell 2.8%.
The fund’s fi nancial year started in a volatile fashion for most asset classes. This was largely caused by the same issues that concerned
investors throughout 2018: namely, Italian politics, the trade war between the US and China, Brexit, and the shift away from monetary
stimulus. In addition, the market had to contend with a sharply falling oil price after the announcement of rising crude stockpiles in the
US. January and February then saw equity markets record strong returns following the news of looser fi scal conditions in the US, Europe
and China, as well as signs that trade talks appeared to be moving towards a positive outcome. The market then gave back some ground
from April as fears mounted around fl attening yield curves (and what it means for the long-term profi tability of banks) and an economy that
showed little enthusiasm.
A combination of individual stocks from a variety of sectors drove performance over the year. The biggest detractor from fund performance
was UK clothes retailer Superdry, which suff ered from unseasonably hot weather and a feud between the management team and the
founder, who had left the company earlier in the year. Another detractor was Criteo, which was hit by the news that Google Chrome is
adding privacy settings to its web browser that will prevent the tracking of cookies (a key part of Criteo’s advertising business); we reduced
our holding. Other notable detractors included Dixons Carphone (UK electronics retailer), Capita (UK outsourcer), Anima (Italian asset
manager) and Fugro. The latter, an oil services company, fell sharply due to a weakening oil price and a leveraged balance sheet. We
retained our positions in each, as we believe they off er compelling value.
The main positive contribution came from Gaztransport et Technigaz,which is the market leader in liquid natural gas (LNG) transportation
infrastructure. The company announced a number of contract wins, and with the outlook for the sector strong, we took the opportunity to
grow our holding. Another big contribution came from Dialog Semiconductor, a position we added in the summer of 2018. The company
announced that it has sold part of the business to Apple, which served to highlight the sum-of-the-parts (SOTP) valuation that attracted us
to the shares. It was also pleasing to see that a number of stocks that we had added to following share price weakness through the fourth
quarter of 2018 were among the fund’s biggest positive contributors in 2019. One example is Soitec, which delivered excellent results,
confi rming our view that the structural demand for silicon-on-insulator (due to its greater effi ciency) outweighed the cyclical downturn we
are seeing in semiconductor demand due to cryptocurrency falls and weak smart phone sales. Positive contributors also included Swedish
house builder JM, as Stockholm property prices look to be stabilising, as well as Greggs, which despite a diffi cult operating environment
in the UK announced strong like-for-like sales. We have since taken profi ts on the latter, as the valuation has moved to a point where the
sausage roll producer is trading at a comparable valuation to a technology company.
We added both Befesa, a leader in the recycling of steel dust, salt slags and aluminium residues, as well as VARTA, which specialises in
coin batteries and trades at an attractive valuation. We also added Marel, which off ers exposure to the growing and resilient food equipment
market. Marel‘s products help food processors reduce waste on their production line, and with an impending Dutch listing, the liquidity
will likely be much improved. We bought former stock market darling UDG Healthcare, which provides commercialisation solutions for
healthcare companies. A problem division led to a meaningful derating (when investors want to pay less for a stock) of its share price,
off ering a good entry point considering that we expect to see growth rates stabilise from here. We invested in two beaten-up cyclicals;
Bodycote, where we like the speciality coatings division, and Flex, which is trading below its book value due to weakness in the sector over
the last few years. We are increasingly confi dent in the medium to long-term growth prospects for Flex and Flex infrastructure.
Disposals included Sanne (we prefer its peer Intertrust), TomTom (following the disposal of its telematics business) and Corestate (German
real estate); despite the latter’s low valuation, we question the fi rm‘s resilience in the event of a market downturn. We sold Georg Fischer
after only a few months of ownership. We wanted to reduce cyclicality at the margin and the strong run for its shares left the valuation less
compelling. Elsewhere, we sold Travis Perkins and Europris, among others, as we saw limited upside.
Headline economic data remains weak in Europe, with manufacturing indicators such as purchasing managers‘ indices still pointing towards
a contraction for industrial earnings. Despite this, we continue to take a more positive view than the consensus, which is increasingly
positioned for a further deterioration and recession. Such negative positioning itself is a bullish sign. But we also take encouragement from
the fact that improving real money growth could indicate a recovery from the third quarter; that the semiconductor cycle appears to be
turning after 18 months of negative growth; that central banks have moved notably more dovish; and the simple arithmetic of lapping easier
hurdles for year-on-year growth as we go through the second half of 2019. That being said, the ‘Japanifi cation’ (low growth and infl ation) of
Europe goes on, with growth and bond yields likely to remain low for some time. Using the Japanese market of the last 20 years as a case
study, we are encouraged that those areas to perform best were small cap, value and yield.
Investment report for the year from 1 July 2018 to 30 June 2019
241
Pan European Smaller Companies Fund
The accompanying notes form an integral part of these fi nancial statements.
Statement of Net Assets
As at 30 June 2019Notes EUR
Assets
Investment in securities at market value 3 623,982,085 Cash at bank 12 7,841,775 Interest and dividends receivable 3 696,936 Subscriptions receivable 59,383 Receivable for investments sold 1,611,246 Unrealised gain on contracts for diff erence 3 -Unrealised gain on futures contracts 3 -Unrealised gain on forward foreign exchange contracts 3 4,514 Purchased option contracts at market value 3 -Swap contracts at market value 3 -Other assets 673,259 Management fee rebate -Total assets 634,869,198
Liabilities
Bank overdraft 12 956,012 Payable for investments purchased 6,582,689 Taxes and expenses payable 1,796,989 Redemptions payable 2,813,590 Unrealised loss on contracts for diff erence 3 -Unrealised loss on futures contracts 3 -Unrealised loss on forward foreign exchange contracts 3 117,395 Sold option contracts at market value 3 -Swap contracts at market value 3 -Dividends payable to shareholders 337,924 Interest and dividends payable on CFD -Other liabilities -Total liabilities 12,604,599
Net assets at the end of the year 622,264,599
Statement of Operations
For the year from 1 July 2018 to 30 June 2019Notes EUR
Income
Dividend income (net of withholding tax) 3 15,362,604 Bond interest income 3 -Income from collective investment schemes 3 -Derivative income 3 -Interest received on contracts for diff erence 3 -Other income 3, 13 78,289 Total income 15,440,893
Expenses
Management fees 6, 14 7,370,904 Administration, registrar and transfer agent fees 6 368,233 Custodian fees 6 121,611 Shareholder servicing fees and distribution fees 6, 14 1,971,908 Depositary fees 6 47,635 Other expenses 6 369,982 Derivative expenses 3 5,209 Interest paid on contracts for diff erence 3 -Performance fees 6 -Taxation ("taxe d'abonnement") 7 207,760 Total expenses 10,463,242
Net income from investments 4,977,651
Net realised gain/(loss)
Net realised loss on investment securities 3 (41,990,949) Net realised gain/loss on contracts for diff erence 3 -Net realised gain/loss on futures contracts 3 -Net realised gain/loss on swap contracts 3 -Net realised gain/loss on options contracts 3 -Net realised gain on forward foreign exchange contracts 3 704,468 Net realised loss on currency exchange (492,270)
Net realised loss on investments and derivatives (41,778,751)
Net change in unrealised appreciation/
depreciation
Change in net unrealised appreciation/depreciation on investments
3 (53,838,755)
Change in net unrealised appreciation/depreciation on contracts for diff erence
3 -
Change in net unrealised appreciation/depreciation on futures contracts
3 -
Change in net unrealised appreciation/depreciation on swap contracts
3 -
Change in net unrealised appreciation/depreciation on options contracts
3 -
Change in net unrealised appreciation/depreciation on forward foreign exchange contracts
3 (70,443)
Change in net unrealised appreciation/depreciation on currency exchange
13,786
Change in unrealised appreciation/depreciation on investments and derivatives
(53,895,412)
Net decrease in assets as a result of operations (90,696,512)
242
Pan European Smaller Companies Fund
Statement of Changes in Net Assets
For the year from 1 July 2018 to 30 June 2019Notes EUR Notes EUR
Net assets at the beginning of the year 1,013,096,125 Proceeds from shares issued 229,819,531 Net income from investments 4,977,651 Payments for shares redeemed (529,701,488) Net realised loss on investments and derivatives (41,778,751) Net equalisation (paid)/received 10 84,867 Change in unrealised appreciation/depreciation on investments and derivatives
(53,895,412) Dividend distributions 11 (337,924)
Net assets at the end of the year 622,264,599
Share Transactions
For the year from 1 July 2018 to 30 June 2019A1
(EUR)
A2
(EUR)
A2 HUSD
(USD)
GU2
(EUR)
H1
(EUR)
H2
(EUR)
Shares outstanding at the beginning of the year 25,507.84 9,592,517.86 577,439.22 - 40,222.96 913,688.04Shares issued during the year 1,466.92 2,873,565.71 100,741.22 61,525.30 58,312.87 447,542.30Shares redeemed during the year (1,360.00) (5,342,573.34) (415,705.05) - (74,178.05) (659,422.75)Shares outstanding at the end of the year 25,614.76 7,123,510.23 262,475.39 61,525.30 24,357.78 701,807.59
Equivalent to a net asset value per share of: 47.63 48.38 38.33 48.17 46.07 17.81
H2 HUSD
(USD)
I1
(EUR)
I2
(EUR)
M2
(EUR)
X2
(EUR)
Z2
(EUR)
Shares outstanding at the beginning of the year 10,317.78 564,854.59 6,153,081.05 1,679,836.68 210,733.97 -Shares issued during the year 1,250.00 14,914.11 1,359,162.74 469.93 18,475.91 5,819.11Shares redeemed during the year (10,450.00) (129,762.04) (3,901,733.23) (1,108,540.53) (81,988.04) (4,600.00)Shares outstanding at the end of the year 1,117.78 450,006.66 3,610,510.56 571,766.08 147,221.84 1,219.11
Equivalent to a net asset value per share of: 49.48 49.77 54.17 46.00 45.15 46.63
TER is calculated in accordance with SFAMA (Swiss Funds and Asset Management Association).* The share class launched in the year and the rate is annualised.There were no performance fees on the fund as at 30 June 2019.
Performance history (unaudited)
Fund & Benchmark 1 year to 1 year to 1 year to 1 year to 1 year to
30 Jun 15 30 Jun 16 30 Jun 17 30 Jun 18 30 Jun 19
% % % % %
Pan European Smaller Companies Fund A2 (EUR) 14.71 (7.95) 36.99 4.23 (6.53) Euromoney Smaller Companies Pan European Index 16.25 (7.99) 25.44* 6.82 (2.83)
Performance quoted in the investment report relates to Class A2 (EUR) shares.* Historic benchmark restated.
Past performance is not a guide to future performance.
244
Pan European Smaller Companies Fund
Portfolio as at 30 June 2019 (continued)
Number
of Securities
Market
Value
EUR
% of
Net
Assets
Transferable securities and money market instruments admitted to an offi cial exchange listing and/or dealt on another regulated market, unless otherwise stated.
* In the case of derivative instruments, Market Value refers to the net profi t or loss and is used in the calculation of the Fund NAV.
** Applicable for authorised funds per the SFC (Securities Financing Commission) guidelines.Any diff erences in the percentage of Net Assets fi gures are the result of roundings.
247
Pan European Smaller Companies Fund
Top ten changes in the securities portfolio for the year
Janus Henderson Horizon Fund (the Company) is an open ended investment company organised as a société anonyme under the laws of
the Grand Duchy of Luxembourg and qualifi es as a société d‘investissment a capital variable (SICAV). The Company was incorporated in
Luxembourg on 30 May 1985 pursuant to the Luxembourg laws of 10 August 1915 on commercial companies (as amended) and is qualifi ed
as an undertaking for collective investment in transferable securities (UCITS) under Part 1 of the Luxembourg law of 17 December 2010
relating to undertakings for collective investment, as amended (the ‘law’).
For the year 1 July 2018 to 30 June 2019, the Company comprised of the following twenty seven live funds:
Bond Funds
Janus Henderson Horizon Fund Core Credit Fund*
Janus Henderson Horizon Fund Emerging Market Corporate Bond Fund
Janus Henderson Horizon Fund Euro Corporate Bond Fund
Janus Henderson Horizon Fund Euro High Yield Bond Fund
Janus Henderson Horizon Fund Global Corporate Bond Fund**
Janus Henderson Horizon Fund Global High Yield Bond Fund
Janus Henderson Horizon Fund Strategic Bond Fund
Janus Henderson Horizon Fund Total Return Bond Fund
Regional Funds
Janus Henderson Horizon Fund Asian Dividend Income Fund
Janus Henderson Horizon Fund Asian Growth Fund
Janus Henderson Horizon Fund Euroland Fund
Janus Henderson Horizon Fund European Growth Fund
Janus Henderson Horizon Fund Japan Opportunities Fund
Janus Henderson Horizon Fund Pan European Dividend Income Fund
Janus Henderson Horizon Fund Pan European Equity Fund
Janus Henderson Horizon Fund US Growth Fund
Specialist Funds
Janus Henderson Horizon Fund Asia-Pacifi c Property Equities Fund
Janus Henderson Horizon Fund Biotechnology Fund***
Janus Henderson Horizon Fund China Fund
Janus Henderson Horizon Fund Global Equity Income Fund
Janus Henderson Horizon Fund Global Multi-Asset Fund
Janus Henderson Horizon Fund Global Natural Resources Fund
Janus Henderson Horizon Fund Global Property Equities Fund
Janus Henderson Horizon Fund Global Sustainable Equity Fund****
Janus Henderson Horizon Fund Global Technology Fund
Janus Henderson Horizon Fund Japanese Smaller Companies Fund
Janus Henderson Horizon Fund Pan European Alpha Fund
Janus Henderson Horizon Fund Pan European Property Equities Fund
Janus Henderson Horizon Fund Pan European Smaller Companies Fund
* The Janus Henderson Horizon Fund Core Credit Fund closed on 11 July 2018.
** The Janus Henderson Horizon Fund Global Corporate Bond Fund closed on 28 February 2019.
*** The Janus Henderson Horizon Fund Biotechnology Fund was launched on 10 December 2018.
**** The Janus Henderson Horizon Fund Global Sustainable Equity Fund was launched on 29 May 2019.
Notes to the Financial Statements
249
As at 30 June 2019
Share classes launched and closed during the year from 1 July 2018 to 30 June 2019
Please refer to the prospectus for each individual fund’s investment objective and policy.
Bond Funds
Fund Name Share Classes Launch date
Emerging Market Corporate Bond Fund A3 HEUR (EUR) 30 April 2019Euro High Yield Bond Fund C2 (EUR) 2 May 2019Total Return Bond Fund F2 HUSD (USD)* 28 January 2019
Fund Name Share Classes Closed date
Core Credit Fund Y1 (USD) 11 July 2018Global Corporate Bond Fund A2 (USD) 28 February 2019Global Corporate Bond Fund A2 HEUR (EUR) 28 February 2019Global Corporate Bond Fund H2 (USD) 28 February 2019Global Corporate Bond Fund H2 HEUR (EUR) 28 February 2019Global Corporate Bond Fund I2 (USD) 28 February 2019Global Corporate Bond Fund I2 HEUR (EUR) 28 February 2019Global Corporate Bond Fund X2 (USD) 28 February 2019Total Return Bond Fund F2 HUSD (USD)* 25 January 2019
Regional Funds
Fund Name Share Classes Launch date
Asian Dividend Income Fund A4 (USD) 2 July 2018European Growth Fund X2 (EUR)** 7 November 2018Pan European Equity Fund Z2 (EUR) 5 September 2018
Fund Name Share Classes Closed date
European Growth Fund X2 (EUR)** 5 November 2018Pan European Equity Fund M2 (EUR) 1 March 2019
* Class F2 HUSD (USD) closed on 25 January 2019 due to investor redemption. Since that date, internal seed monies were reinvested to
reopen the class on 28 January 2019.
** Class X2 (EUR) closed on 5 November 2018 due to investor redemption. Since that date, internal seed monies were reinvested to
reopen the class on 7 November 2018.
Notes to the Financial Statements (continued)
250
As at 30 June 2019
Specialist Funds
Fund Name Share Classes Launch date
Biotechnology Fund A2 (USD) 10 December 2018Biotechnology Fund E2 (USD) 10 December 2018Biotechnology Fund E2 HEUR (EUR) 10 December 2018Biotechnology Fund H2 (USD) 10 December 2018Biotechnology Fund IU2 (USD) 10 December 2018Global Equity Income Fund X3 (USD) 28 November 2018Pan European Alpha Fund GU2 (EUR) 7 August 2018Pan European Alpha Fund Z2 (EUR) 1 March 2019Pan European Smaller Companies Fund GU2 (EUR) 4 September 2018Pan European Smaller Companies Fund Z2 (EUR) 1 March 2019Global Sustainable Equity Fund A2 (EUR) 29 May 2019Global Sustainable Equity Fund A2 (SGD) 29 May 2019Global Sustainable Equity Fund A2 (USD) 29 May 2019Global Sustainable Equity Fund A2 HSGD (SGD) 29 May 2019Global Sustainable Equity Fund GU2 (USD) 29 May 2019Global Sustainable Equity Fund H2 (EUR) 29 May 2019Global Sustainable Equity Fund H2 (SGD) 29 May 2019Global Sustainable Equity Fund H2 (USD) 29 May 2019Global Sustainable Equity Fund H2 HSGD (SGD) 29 May 2019Global Sustainable Equity Fund IU2 (EUR) 29 May 2019Global Sustainable Equity Fund IU2 (GBP) 29 May 2019Global Sustainable Equity Fund IU2 (SGD) 29 May 2019Global Sustainable Equity Fund IU2 (USD) 29 May 2019Global Sustainable Equity Fund IU2 HSGD (SGD) 29 May 2019Global Sustainable Equity Fund Z2 (USD) 29 May 2019Global Property Equities Fund I3 (USD) 4 April 2019
Fund Name Share Classes Closed date
Japanese Smaller Companies Fund M2 (JPY) 25 July 2018
Notes to the Financial Statements (continued)
251
As at 30 June 2019
Policies applicable to all funds
To the extent permitted by the Section ‘Investment Restrictions’ of the prospectus, the funds may invest in either closed-ended or open-
ended investment funds, or other transferable securities, including derivatives, which invest in, or provide a return linked to, any of the
transferable securities that they are permitted to invest in.
For the purpose of maximising portfolio returns, the funds may also, within the limits set forth in the Section ‘Investment Restrictions’ of the
prospectus, engage in a policy of currency hedging and make use of derivatives for effi cient portfolio management when it is thought by the
Investment Manager to be appropriate.
Further, some of the funds may invest in derivatives within the limits set forth in the Section ‘Investment Restrictions’ of the prospectus
in order to enhance returns. All funds may also, to the extent permitted by applicable regulations, on a temporary basis or for defensive
purposes, invest in government debt securities.
Where a fund‘s investment remit is restricted to companies in a particular country or geographical area, a portion of that fund‘s total assets
may be invested in companies domiciled outside of that country or geographical area, respectively, but which derive a signifi cant portion of
their revenues and/or profi ts from operations in that country or geographical area, respectively.
Cross sub-fund investments
As at 28 June 2019, cross sub-fund investments represented an amount of USD 18,650,998 and therefore the total combined Net Asset
Value (NAV), without cross-investments, would be USD 11,670,507,940.
The following funds held cross investments at the year end:
Janus Henderson Horizon Fund Global Multi-Asset Fund, which invested in Janus Henderson Horizon Fund Euro High Yield Bond Fund,
Janus Henderson Horizon Fund Global High Yield Bond Fund and Janus Henderson Horizon Fund Total Return Bond Fund.
Janus Henderson Horizon Fund Euro Corporate Bond Fund, which invested in Janus Henderson Horizon Fund Euro High Yield Bond Fund.
2. Presentation of Financial Statements
The accompanying fi nancial statements present the fi nancial position including the assets and liabilities of the Company and each fund in
accordance with Luxembourg legal and regulatory requirements relating to the preparation and presentation of the fi nancial statements.
They are prepared in the designated currency of each fund as stated in the prospectus. The combined statements of the Company are
prepared in US Dollars.
The fi nancial statements include dividend declarations as at the accounting date 30 June 2019. As such the Net Asset values disclosed
throughout the report may diff er from those published at the offi cial valuation point on 28 June 2019.
3. Signifi cant Accounting Policies
The following is a summary of the signifi cant accounting policies followed by the Company:
Valuation of Investment Securities
The valuation of investments within the portfolio of each fund will normally be valued on the basis of either the last available mid-market
price (the mid-point between the quoted bid and off er prices) or for certain markets, the last traded price on the principal stock exchange
or market on which the investments are quoted, listed or normally dealt in on the relevant Business Day as at 13:00 pm Luxembourg time
with the exception of (Global Equity Income Fund, Emerging Market Corporate Bond Fund, Global Corporate Bond Fund, Global High Yield
Bond Fund, Global Technology Fund, Global Property Equities Fund, Global Natural Resources Fund, US Growth Fund, Global Multi-Asset
Fund, Strategic Bond Fund, Biotechnology Fund and Global Sustainable Equity Fund) which are valued as at 16:00 pm Luxembourg time.
For the purposes of the fi nancial statements, the investments have been valued on the relevant market or traded price as at 28 June 2019.
The exchange rates used to value the investments of each fund are as the valuation point on or after the Dealing cut off on the Dealing Day
concerned.
All other assets, including restricted and not readily marketable securities, will be valued in such manner as the Directors consider
appropriate to refl ect their fair value. The Company reserves the right to utilise fair value techniques where the underlying markets are
closed for trading at the fund‘s valuation point and where the latest available market prices may not accurately represent the fair value of the
fund‘s holdings due to prevailing market conditions.
Notes to the Financial Statements (continued)
252
As at 30 June 2019
3. Signifi cant Accounting Policies (continued)
Valuation of Investment Securities (continued)
Units or shares of collective investment schemes (CIS) are valued at their last determined and available net asset value or, if such price is
not representative of the fair market value of such assets, then the price as determined by the Directors on a fair and equitable basis. Units
or shares of a listed closed-ended CIS are valued at their last available stock market value.
In the case of short term instruments, the value of the instrument based on the net acquisition cost, is gradually adjusted to the par value
price thereof. In the event of material changes in market conditions, the valuation basis is adjusted to the new market yields.
As a result of time variations in certain markets the prices applied to some investments do not necessarily refl ect the closing market prices
for the same calendar day as the relevant dealing day.
Any diff erence arising between the cost of securities held at the reporting date and their market value at that date is recognised as
unrealised appreciation or depreciation.
Forward foreign exchange contracts
Forward foreign exchange contracts are valued at the forward rate applicable at the statement of net assets date for the year until maturity.
Gains or losses resulting from forward foreign exchange contracts are recognised in the Statement of Operations and Statement of
Changes in Net Assets. Open forward foreign exchange contracts are shown in the portfolio statement at fair value.
Forward foreign currency contracts on hedged share classes
Open forward currency contracts on hedged share classes are shown in the portfolio statement at fair value. The net gains/(losses) on
forward currency contracts on hedged unit share classes are apportioned between Hedged income on forward currency contracts in the
Revenue account and Forward currency contracts on hedged share classes in the Statement of Operations and Statement of Changes in
Net Assets, refl ecting the income and capital elements of the hedged share classes.
Financial futures contracts
Financial future contracts are valued at the exchange quoted price at 13:00 pm Luxembourg time with the exception of the Global
Technology Fund, the Global Property Equities Fund, the Global High Yield Bond Fund, the Global Equity Income Fund, the US Growth
Fund, the Global Multi-Asset Fund and the Strategic Bond Fund which are valued as at 16:00 pm Luxembourg time. Initial margin deposits
are made in cash upon entering into futures contracts. During the year when the fi nancial future contract is open, changes in the value of
the contract are recognised as unrealised gains and losses by marking to market on a daily basis to refl ect the market value of the contract
at the end of each day’s trading. Variation margin payments are made or received, depending upon whether unrealised losses or gains are
incurred. Variation margin payments are recorded in the futures margin account in the statement of net assets. When the contract is closed,
the fund records a realised gain or loss equal to the diff erence between the proceeds from (or cost of) the closing transaction and the
opening transaction.
Options
When a fund purchases an option, it pays a premium and an amount equal to that premium is recorded as an investment. When a fund
sells an option, it receives a premium and an amount equal to that premium is recorded as a liability. The investment or liability is adjusted
daily to refl ect the current market value of the option. If an option expires unexercised, the fund realises a gain or loss to the extent of the
premium received or paid.
For the Asian Dividend Income Fund only, option premiums are treated as revenue and distributed accordingly.
Swap contracts
Funds may enter into credit default swaps and other types of swap agreements such as interest rate swaps, total return swaps, swaptions
and infl ation linked swaps. Gains or losses resulting from swap contracts are recognised in the Statement of Operations and changes in
net assets. The premiums received resulting from credit default swaps are recognised under Derivative income/expense in the Statement
of Operations. Swaps are valued at fair market value as determined in good faith pursuant to procedures established by the Management
Company and ratifi ed by the Directors.
Notes to the Financial Statements (continued)
253
As at 30 June 2019
3. Signifi cant Accounting Policies (continued)
Contracts for Diff erence
For contracts for diff erence, changes in the value of the contracts are recognised as unrealised gains or losses in the statement of net
assets by ‘marked-to-market’ the value at the balance sheet date, using prices supplied by independent pricing services that are based
on the closing prices of the underlying securities on the recognised exchanges. When a contract is closed, the diff erence between the
proceeds from (or cost of) the closing transaction and the original transaction is recorded as a realised gain or loss in the Statement of
Operations.
Realised gains & losses on sale of investments
The computation of realised gains and losses on sales of investments is made on the basis of average cost.
Income
Distributions from Collective Investment Schemes (CIS) and dividends receivable from quoted equity and non equity shares are credited to
revenue, when the security is quoted ex-dividend. Dividends on unquoted stocks are credited to revenue when the dividend is announced.
Bank interest and margin interest earned on derivative positions are recognised on an accruals basis. Positive margin interest is disclosed
under the caption ‘Derivative income’ and any negative margin interest is disclosed under ‘Derivative expense’ in the Statement of
Operations.
Bond interest and interest from certifi cates of deposit are accrued on a daily basis.
Long positions held on contracts for diff erence are subject to fi nancing costs. Interest is calculated and charged on a daily basis on the
contract value. Similarly if short positions are held, interest will be received. This interest paid or received is recorded as ‚Interest received/
paid on contracts for diff erence‘ within the Statement of Operations, depending on it‘s nature.
Dividend, REIT and interest income is disclosed net of withholding tax where applicable.
Dividend charges or credits are used to ensure that the contracts for diff erence mirror the value of the underlying stock when a dividend
is announced. If a long position is held a payment will be received on the ex-dividend date and is refl ected within ‘Derivative income’ in the
Statement of Operations. If a short position is held, a charge is deducted on ex-dividend date and is refl ected within ‘Derivative expenses’ in
the Statement of Operations.
Where the fund invests into a CIS, management fee rebates are received from Investment Managers and are recognised when the
entitlement arises, as either income or capital in accordance with the treatment of the management fee charged on the underlying collective
investment schemes. Management fee rebates are refl ected in the Statement of Operations under ‘Other income’.
Revenue derived from the gains/losses on hedged class forward currency contracts is allocated to both the capital and revenue of the
share class based upon the prior day capital/revenue split.
Securities lending
The Company has entered into a securities lending programme with BNP Paribas Securities Services acting as the Securities Lending
Agent for the purposes of effi cient portfolio management and in order to generate additional revenue.
The Securities Lending Agent shall ensure that suffi cient value and quality of collateral is received before or simultaneously with the
movement of loaned collateral. This will then be held throughout the duration of the loan transaction and only returned once the lent asset
has been received or returned back to the relevant fund. The Securities Lending Agent will also monitor and maintain all operational aspects
of the assets while they are on loan.
Securities lending revenue is accounted for in the Statement of Operations within ‘Other income’.
Designated currencies
As permitted by Luxembourg Law, the accounts and records of the Company are maintained in US Dollars (USD) with the exception of the
Euroland Fund, the European Growth Fund, the Pan European Smaller Companies Fund, the Pan European Property Equities Fund, the Pan
European Equity Fund, the Pan European Alpha Fund, the Euro Corporate Bond Fund, the Euro High Yield Bond Fund, the Total Return Bond
Fund and the Pan European Dividend Income Fund which are maintained in Euros (EUR). The base currency of Global Multi-Asset Fund is
Sterling (GBP) and the base currency of Japan Opportunities Fund and Japanese Smaller Companies Fund are in Yen (JPY).
Transactions carried out in any other currency other than US Dollars, which is the designated currency of the Company, are translated at
the exchange rates ruling at the transaction date. Assets and liabilities are translated at the exchange rates ruling at the balance sheet date.
When the designated currency of a fund is not US Dollars, the diff erence between the opening net assets converted at exchange rates
ruling at the beginning of the year, and closing net assets converted at exchange rates ruling at the end of the fi nancial accounting year are
disclosed in the combined statement of change in net assets as ‘exchange rate eff ect on opening net assets’.
Notes to the Financial Statements (continued)
254
As at 30 June 2019
3. Signifi cant Accounting Policies (continued)
Hedged share classes
Any gains or losses that are incurred as a result of the hedging transaction will accrue to the relevant share class only.
The value of the share class to be hedged will be made up of both capital and income elements and the investment manager intends to
hedge between 95-105% of the value of each hedged share class. Adjustments to any hedge to keep within this target range will only
be made when the required adjustment is material. As such the hedged class shares will not be completely protected from all currency
fl uctuations.
Formation costs
There were no formation expenses being charged in the year.
4. Dilution adjustment
The Janus Henderson Horizon Fund operates a single swinging price policy, the threshold of which is determined by the Directors.
The Investment Manager may consider that it is in the best interests of the existing investors to apply a swing pricing adjustment, given the
prevailing market conditions and the level of certain subscriptions or redemptions requested by shareholders in relation to the size of any
fund. A swing pricing adjustment (a means of compensating a fund for the dilution eff ect of material subscription or redemption activity
within the fund) may be applied to the Net Asset Value to account for the cost of dealing in the underlying securities. The swing pricing
mechanism may be applied across all funds and may be adopted to protect the interests of shareholders of the Company.
If the net dealing on any valuation day is greater than the set tolerance of the total value of a fund, the price will be swung up/down
depending on whether the net dealing is positive/negative.
The adjustment is included in the price of a fund, therefore all investors in a fund will be aff ected by the price adjustment. e.g. if the price is
swung up, investors buying into a fund will get fewer shares for their investment amount, while if it is swung down, investors redeeming their
shares will do so at a lower price.
On 28 June 2019, the last working day of the year under review, no dilution adjustments were applied to the funds.
5. Exchange Rates
The exchange rates used for the conversion into USD of assets and liabilities of each fund denominated in other currencies and with
respect to funds whose investment are valued at 13:00 Luxembourg time as detailed in Note 3 to the fi nancial statements as at
6. Fees and Operational expensesGeneralThe Management Company and/or a Principal Distributor may discount, or share the whole or any part of the charges or fees outlined below with the Administrator, Registrar and Transfer Agent, Authorised Distributors or other intermediary or investor. In addition, the Management Company and/or a Principal Distributor may waive any of the charges or fees outlined above, in whole or in part, which the Management Company and/or a Principal Distributor is respectively entitled to receive.
Further, the Investment Manager may discount the whole or any part of the charges and fees outlined below to the Authorised Distributor or other intermediary or investor.
Allocation of charges and expensesEach share class of each fund is charged with all costs and expenses attributable to it. Such costs may be amortised over such period as the Directors may determine but not in excess of fi ve years. Costs and expenses not attributable to a particular class or fund are allocated between all of the classes of shares pro rata to their respective net asset values.
In the case of amortised costs allocated pro rata, the Directors reserve the right to recalculate such allocation over the course of the amortisation period if they believe that such is fair and equitable in the light of the changes in funds‘ respective net asset values.
Management feesThe management fee is payable out of the assets of the fund in respect of all share classes. The management fee accrues daily and is paid monthly in arrears.
For the year ended 30 June 2019 the latest management fees, as a percentage per annum on the total net assets of the relevant fund, were as follows:
Class
A, X
Class
AB
Class
B, IB
Class
C
Class
GU, E
Class S,
F, IF
Class
G
Class
H
Class
I
Class
IU
Class
M
Class
Q, S
Class
R
Bond Funds
Emerging Market Corporate Bond Fund 0.75% 1.50% 1.00% 1.00% 0.95% 2.00% 0.38% 0.75% 1.00% 1.00% 2.00% 1.75%Euro Corporate Bond Fund 0.75% 1.50% 1.00% 0.95% 2.00% 0.40% 0.38% 0.75% 1.00% 1.00% 2.00% 1.75%Euro High Yield Bond Fund 0.75% 1.50% 1.00% 1.00% 0.95% 2.00% 0.65% 0.38% 0.75% 1.00% 1.00% 2.00% 1.75%Global High Yield Bond Fund 0.75% 1.50% 1.00% 0.95% 2.00% 0.65% 0.38% 0.75% 1.00% 1.00% 2.00% 1.75%Strategic Bond Fund 0.75% 1.50% 1.00% 0.95% 2.00% 0.38% 1.00% 1.00% 2.00% 1.75%Total Return Bond Fund 1.00%* 1.50% 1.00% 0.95% 2.00% 0.65% 0.38% 0.75% 1.00% 1.00% 2.00% 1.75%
Regional Funds
Asian Dividend Income Fund 1.20% 1.50% 1.00% 1.50% 0.95% 2.00% 0.85% 0.60% 1.00% 1.00% 1.00% 2.00% 1.75%Asian Growth Fund 1.20% 1.50% 1.00% 1.50% 0.95% 2.00% 0.85% 0.60% 1.00% 1.00% 1.00% 2.00% 1.75%Euroland Fund 1.20% 1.50% 1.00% 1.50% 0.95% 2.00% 0.85% 0.60% 1.00% 1.00% 1.00% 2.00% 1.75%European Growth Fund 1.20% 1.50% 1.00% 1.50% 0.95% 2.00% 0.85% 0.60% 1.00% 1.00% 1.00% 2.00% 1.75%Japan Opportunities Fund 1.20% 1.50% 1.00% 1.50% 0.95% 2.00% 0.85% 0.60% 1.00% 1.00% 1.00% 2.00% 1.75%Pan European Dividend Income Fund 1.20% 1.50% 1.00% 1.50% 0.95% 2.00% 0.60% 1.00% 1.00% 2.00% 1.75%Pan European Equity Fund 1.20% 1.50% 1.00% 1.20% 0.95% 2.00% 0.85% 0.60% 1.00% 1.00% 1.00% 2.00% 1.75%US Growth Fund 1.20% 1.50% 1.00% 1.50% 0.95% 2.00% 0.85% 0.60% 1.00% 1.00% 1.00% 2.00% 1.75%
* The AMC of the Class A share is 0.75%, Class X is 1.00%.** The Biotechnology Fund was launched on 10 December 2018.*** The Global Sustainable Equity Fund was launched on 29 May 2019.**** For A and H classes of the Janus Henderson Horizon Global Natural Resources Fund a temporary fee subsidy is applied to these share
classes to ensure OCF comparability with peer share classes.
The management fee for Class Z shares is agreed between the investor and the Company and is not payable out of the property of the fund.
Notes to the Financial Statements (continued)
256
As at 30 June 2019
6. Fees and Operational expenses (continued)
Performance fees
In consideration of the investment services provided in relation to the relevant funds, the Investment Manager, in addition to the management
fee, is entitled to receive out of the assets of the relevant fund a performance fee (excluding the Global Multi-Asset Fund, Global Sustainable
Equity Fund, Strategic Bond Fund, Total Return Bond Fund, Class B and Class R Shares of the European Growth Fund and excluding Class
C, Class M and Class Z Shares of the relevant funds). The basis of the calculation is detailed in the prospectus. At 30 June 2019, the following
accruals were made for performance fees: Euro Corporate Bond Fund EUR 61,492, Euro High Yield Bond Fund EUR 291,783, Global High
Yield Bond Fund USD 133,506, Asian Dividend Income Fund USD 210, Euroland Fund EUR 8,800, Japan Opportunities Fund JPY 40,603,
Pan European Dividend Income Fund EUR 1, US Growth Fund 10, Biotechnology Fund USD 64,989, Global Property Equities Fund
USD 482,957 and Pan European Property Equities Fund EUR 303,880.
On a daily basis, the performance fee will be calculated as a percentage of the diff erence between the net asset value per share and the
higher of the net asset value per share at the beginning of the performance period and the relevant benchmark level on the calculation day,
multiplied by the average number of shares in issue over the period. For the purpose of this calculation the last time that a performance fee
was paid (or the date on which the performance fee was introduced for the fi rst period) will be considered to be the beginning of the period.
As at the end of each performance period any performance fee accrual for that period in respect of each relevant fund will then be paid
over as a performance fee.
Performance fees for share classes are calculated by reference to the performance of the base currency returns of the fund.
The total net asset value per share may diff er between classes and sub-classes, separate performance fee calculations will be carried out
for separate classes and sub-classes within the same fund, which therefore may become subject to diff erent amounts of performance fees.
In the case of the distribution shares of the funds, however, any distributions made during the relevant performance period shall be added
back to the net asset value per share for the purpose of the performance fee calculation.
Additional fees and expenses
Additional fees and expenses will be charged to Shareholders of Class C, Class G, Class I, Class M and Class Q shares as part of the
management fee set out in ‘Management Fees’ on page 256. Any additional fees and expenses that the Company cannot recover from
the Shareholders of Class C, Class G, Class I, Class M and Class Q shares through the management fee shall be borne by the Investment
Manager.
Shareholders of Class A, Class B, Class E, Class F, Class GU, Class H, Class IU, Class IF, Class R, Class S, Class X or Class Z shares will
be charged additional fees and expenses in addition to the relevant‚ ‘Management Fees’ set out on page 256.
The additional fees and expenses which are set out in detail, are :
Adminstration, Registrar and Transfer Agent fees
Depositary fees
Custodian fees
Shareholder Servicing fee
Distribution fee
Other expenses
Collective Investment Schemes
Administration, Registrar and Transfer Agent Fees
BNP Paribas Securities Services, Luxembourg Branch has been appointed by the Management Company as Administrator under a fund
administration agreement (the ‘Fund Administration Service Agreement’).
The Administrator is entitled to receive out of the assets of the Company fees in consideration for providing administration services to the
Company along with reasonable out-of-pocket expenses and disbursements. The fees of the Administrator comprise transaction based
fees and asset based fees and do not exceed 0.18% p.a of the net assets of the relevant fund. The actual fees paid are disclosed in the
‘Statement of Operations’ and accrued on a daily basis.
RBC Investor Services Bank S.A., was appointed by the Management Company as Registrar and Transfer Agent under a registrar and
transfer agent agreement (the ‘Registrar and Transfer Agent Agreement’). The Registrar Agent is responsible for processing the issue,
redemption and transfer of shares as well as the keeping of the register of Shareholders.
The Registrar and Transfer Agent is entitled to receive out of the assets of each fund, fees in consideration for providing registrar agency
services to the Company along with such out-of-pocket expenses and disbursements as are deemed reasonable and customary by the
Directors. The fees of the Registrar Agent comprise transaction based fees and asset based fees and do not exceed 0.12% p.a. of the total
assets of the relevant fund. The actual fees paid will be disclosed in the ‘Statement of Operations’.
Notes to the Financial Statements (continued)
257
As at 30 June 2019
6. Fees and Operational expenses (continued)
Depositary Fees
BNP Paribas Securities Services, Luxembourg Branch has been appointed as Depositary for the Company in order to comply with the
UCITS V Directive. The Depositary is entitled to receive out of the assets of each fund, fees in consideration for providing services to it,
along with such out-of-offi ce expenses and disbursements as are deemed reasonable and customary by the Directors. The Company will
pay to the Depositary a fee for fi duciary services, which is set at a rate of 0.006% per annum of the total net assets of the relevant fund
(subject to a minimum fee of GBP 1,200 (USD 1,800) per fund).
Custodian fees
BNP Paribas Securities Services, Luxembourg Branch has been appointed by the Company under an agreement (the ‘Custodian
Agreement’) to assure the safe custody of the Company’s assets.
The Depositary is also entitled to receive out of the assets of the fund, custody fees comprising asset-based fees and transaction-based
fees that vary depending on the market in which a particular fund invests; these fees will not exceed 0.65% per annum of the value of the
assets of the relevant fund and GBP 120 (USD 190) per transaction respectively. Both fees are accrued daily and paid monthly in arrears.
Shareholder Servicing Fee
A shareholder servicing fee is payable from the assets of each fund at the rate of 0.5% per annum for Class A, Class F and Class X shares
and 0.30% per annum for Class H shares of the Regional and Specialist funds (except for the Global Multi-Asset Fund) and 0.25% per
annum for the Global Multi-Asset Fund and the Bond funds average total net assets. This fee is accrued daily and payable monthly in
arrears. This fee is payable to the Principal Distributors for the provision of the following services; responding to existing investors‘ queries,
maintenance of records of shareholders‘ accounts, issuance and delivery of periodic account statements to shareholders and assistance in
handling purchases, exchanges and redemption of shares.
No shareholder servicing fees are payable in respect of all other share classes of the relevant funds.
Distribution Fee
A distribution fee is payable on Class X shares from the assets of each fund to the Authorised Distributor at the annual rate of 0.6% per
annum for the Regional and Specialist funds, and 0.35% per annum for the Bond funds of the relevant fund’s average daily net assets,
accrued daily and payable monthly in arrears. The fee is payable to the Authorised Distributor as compensation for providing distribution-
related services to the funds with respect to Class X shares.
Other Expenses
The Company will also pay, as far is as allowable under applicable regulations, all other operating expenses, which include, without
limitation, taxes, expenses for legal and auditing services, printing Shareholders‘ reports, prospectuses, the fees and all reasonable out of
pocket expenses incurred by the Directors, registration fees and other expenses payable to supervisory and local authorities, regulatory
and tax representatives appointed in various jurisdictions, insurance, interest costs, brokerage fees and costs. The Company will also pay
fees or other charges levied in respect of the provision and use of benchmarks, dividend and redemption payment costs and the costs of
publication of the Net Asset Value per share or other fund information, including, but not limited to, that required to be published by any
regulatory authority.
During the year an analysis of expense accruals was completed which resulted in prior year expense adjustments being processed.
The cumulative sum of these adjustments are shown under the ‘Other expenses’ caption in the Statement of Operations of each fund,
which could result in a negative “other expenses” balance for some of the funds.
Collective Investment Schemes
When a fund may invest all or substantially all of its assets in collective investment schemes, there may be additional costs of investing
in the underlying funds (‘underlying funds‘ TERs’) which would increase the TER of the fund. Accordingly, the funds TER will include a
synthetic element refl ecting these underlying funds‘ TERs.
When investing into other collective investment funds managed by a Janus Henderson group company, there will be no double charging of
management fees.
Initial Charge
An initial charge payable to a Principal Distributor (or Authorised Distributors at a Principal Distributor‘s discretion) may be levied which until
otherwise notifi ed, will not exceed 5% of the total amount invested by an investor (which equals a maximum of 5.26% of the net asset value
of the shares) on the issue of certain shares of the relevant funds.
Further details can be found in the section (fees ‘Charges and Expenses’ of the prospectus).
Notes to the Financial Statements (continued)
258
As at 30 June 2019
7. Taxation
Under Luxembourg tax law, there are no Luxembourg income, withholding or capital gains taxes payable by the Company. The Company
will, however, be subject to the tax on Luxembourg undertakings for collective investment (Tax d‘abonnement), calculated and payable
quarterly, on the aggregate net asset value of each fund at the end of each quarter being 0.01% per annum on Class E, Class G, Class GU,
Class I, Class IU, Class IF, Class B, Class C, Class M, Class Y and Class Z shares and 0.05% per annum on all other share classes. No
such tax is due on the portion of the Company’s assets invested in other Luxembourg undertakings for collective investment.
No stamp duty or other tax is payable in Luxembourg on the issue of shares in the Company.
Capital gains, dividends and interest on securities issued in other countries may be subject to withholding and capital gains taxes imposed
by such countries.
On 1 April 2018, India introduced a taxation regime for long-term capital gains. As a result of this, the Janus Henderson Asian Growth Fund
introduced an accrual for incremental Indian capital gains earned since 1 April 2018 on Indian securities.
8. Share Class Details
The Company off ers 4 sub-classes. These sub-classes of Shares are abbreviated in the Financial Statements as A1, A2, A3, A4, I1, I2 and
I3. Class C, Class M, Class N, Class Q, Class S and Class Z off er only accumulation shares. Class B and Class R Distribution shares are
only available on the European Growth Fund. The fee structure is described in note 6.
Sub-Class 1 shares - This share class distributes substantially all of the investment income after the deduction of fees, charges and
expenses. Distributions will not include realised and unrealised capital gains.
Sub-Class 2 shares - This share class does not distribute gross income, net realised and unrealised capital gains but instead accumulates
it, thereby increasing the capital value of the share class.
Sub-Class 3 shares - This share class distributes substantially all of the investment income before the deduction of fees, charges and
expenses. To allow more investment income to be distributed, fees, charges and expenses may be deducted from capital and may also
include realised and unrealised capital gains.
Sub-Class 4 shares - This share class distributes substantially all of the investment income over the relevant accounting year and potentially
a portion of capital before the deduction of fees, charges and expenses. To allow more investment income to be distributed, fees,charges
and expense may be deducted from capital and may also include realised and unrealised capital gains and original capital invested.
All shares of the Company are fully paid shares of no par value and at any time are equal to the total net assets of the funds. Regardless of
its net asset value per share, each share is entitled to one vote at all meetings of the shareholders.
Shareholders may switch all or part of their shareholdings from one or more of the funds into the same class of one or more of the other
funds on any Business Day.
Switches into Class E, Class G, Class GU, Class I, Class IU, Class IF, Class B, Class C, Class M and/or Class Z shares are only permitted
if the investor switching into them is an institutional investor within the meaning of Article 174 of the law of 17 December 2010, relating to
undertakings for collective investment.
Switches into Class G and Class GU shares are restricted to institutional investors with a minimum total investment in funds of the
Company of €1,000,000,000 (or the equivalent in another currency) at the time of the initial investment.
Class B and Class R shares are closed to investments from new investors.
An up to date list of the share classes available for the funds can be obtained from the website www.janushenderson.com/lupi/documents-fi nder-eu
or from the registered offi ce of the Company.
Hedged share classes
The funds may off er Hedged Share Classes in order to mitigate the currency risk between the base currency of the fund and the currency
of the hedged share class. Where a Hedged share class is available it will be expressed with the pre-fi x ‘H’ immediately before the
currency denomination and described for instance as Class A HEUR, Class A HGBP, Class A HUSD, Class A CNH, Class A HAUD,
Class A HSEK, Class A HCHF etc. The Company‘s Investment Manager will employ fi nancial instruments, such as foreign exchange
forward contracts, as a hedge.
An up-to-date list of the share classes available for the funds is available at the registered offi ce of the Company.
Notes to the Financial Statements (continued)
259
As at 30 June 2019
9. Net Asset Value
The net asset value per share of each fund will be expressed in the base currency of the fund, calculated by the Administrator on each
business day in Luxembourg at each Valuation point and on other days as approved by the Board.
The net asset value for each class of each fund is calculated by determining the value of the assets of the relevant fund applicable to that
class, including accrued income, and deducting all liabilities (including all fees and charges) of that class, and dividing the resultant sum
by the total number of shares of that class in the relevant fund in issue or allotted at that time, (the resulting amount being rounded to the
nearest two decimal places) to give the net asset value per share per class of the fund.
Further details on rules that apply in valuing the total assets can be found in the current prospectus.
If the Company had calculated the net asset values solely with a view to publication, the market prices used to value the net assets would
have been the closing prices on 30 June 2019. However, these net asset values would not have been signifi cantly diff erent from those
shown in these fi nancial statements, except for the following sub-funds, for which the following variation would have been observed:
Sub-fund Currency % diff erence
(in % of NAV)
Biotechnology Fund USD 1.28
US Growth Fund USD 0.74
10. Equalisation
The Company will maintain equalisation accounts in relation to the shares with a view to ensuring that the levels of distribution payable
to investors in the shares are not aff ected by the issue and redemption of, or the switch from or into, shares of those funds during an
accounting year. The price at which shares are bought by an investor will therefore be deemed to include an equalisation payment (which
will be credited to the relevant equalisation account) calculated by reference to the accrued income of the share class, net of fees, charges
and expenses where applicable.
The fi rst distribution which an investor receives in respect of such shares following the purchases may include a repayment of capital.
Notes to the Financial Statements (continued)
260
As at 30 June 2019
11. Dividend distributions
During the year from 1 July 2018 to 30 June 2019 dividends were declared and were paid/accumulated on the following funds:
Margin accounts 1,741,097 Bank overdraft (323,792)
23,125,056 Margin accounts 7,607,785
19,700,795
Global Corporate Bond Fund** USD
Cash at bank 31,370 Global Equity Income Fund USD
Bank overdraft (26) Cash at bank 521,259
31,344 521,259
Global High Yield Bond Fund USD Global Multi-Asset Fund GBP
Cash at bank 20,185,212 Cash at bank 2,489,450
Margin accounts 2,118,814 Bank overdraft (60,429)
22,304,026 Margin accounts 858,577
3,287,598
Strategic Bond Fund USD
Cash at bank 3,356,065 Global Natural Resources Fund USD
Margin accounts 172,728 Cash at bank 241,736
3,528,793 241,736
Total Return Bond Fund EUR Global Property Equities Fund USD
Cash at bank 64,873,158 Cash at bank 11,840,024
Bank overdraft (9,530) Bank overdraft (1,780,732)
Term deposits 520,000 10,059,292
Margin accounts 12,303,913
77,687,541 Global Sustainable Equity Fund**** USD
Cash at bank 124,043
Asian Dividend Income Fund USD 124,043
Cash at bank 11,025,726
Bank overdraft (10,986,967) Global Technology Fund USD
Term deposits 690,000 Cash at bank 56,922,147
728,759 Bank overdraft (170,223)
56,751,924
Asian Growth Fund USD
Cash at bank 1,209,587 Japanese Smaller Companies Fund JPY
1,209,587 Cash at bank 570,252,003
Bank overdraft (19,063,159)
Euroland Fund EUR 551,188,844
Cash at bank 33,047,969
Bank overdraft (289,963) Pan European Alpha Fund EUR
32,758,006 Cash at bank 63,311,201
Bank overdraft (262,210)
European Growth Fund EUR Margin accounts 24,779,030
Cash at bank 1,030,645 87,828,021
1,030,645
Pan European Property Equities Fund EUR
Japan Opportunities Fund JPY Cash at bank 6,229,759
Cash at bank 100,033,500 Bank overdraft (1,760,478)
Bank overdraft (1,181,022) 4,469,281
98,852,478
Pan European Smaller Companies Fund EUR
Pan European Dividend Income Fund EUR Cash at bank 7,841,775
Cash at bank 156,640 Bank overdraft (956,012)
156,640 6,885,763
* The Core Credit Fund was closed on 11 July 2018.** The Global Corporate Bond Fund was closed on 28 February 2019.*** The Biotechnology Fund was launched on 10 December 2018.**** The Global Sustainable Equity Fund was launched on 29 May 2019.
Notes to the Financial Statements (continued)
12. Cash and cash equivalents and Bank overdrafts (continued)
271
As at 30 June 2019
13. Securities lending activities
The Company has entered into securities lending agreements for a number of equity and bond funds. In return for making securities
available for loan throughout the year, the funds participating in the program received revenue which is refl ected in the Financial Statements
of each participating fund under the‚ ‘Other income’ caption. The Company has appointed BNP Paribas Securities Services UK Limited
(BP2S UK), as agent for the securities lending program. As remuneration for this agency role, BP2S UK receives a percentage of the
variable fees from the associated program. All securities are fully collateralised.
As at 30 June 2019, the market value of the securities lent is as follows:
Fund Counterparty Ccy Total market
value of
securities on loan
Amount of
collateral
received
Type of collateral
Euro Corporate Bond Fund
ABN Amro EUR 1,021,470 1,076,675 Equity
Barclays EUR 21,167,940 24,212,103 Government Bond/
Corporate Bond
BNP Paribas EUR 41,288,911 43,499,461 Government Bond/
Corporate Bond
Citigroup EUR 9,494,570 11,160,431 Government Bond
Goldman Sachs EUR 5,355,685 5,661,819 Government Bond
J P Morgan EUR 35,645,735 37,678,192 Government Bond/
Corporate Bond
Total 113,974,311 123,288,681
Euro High Yield Bond Fund
Credit Suisse EUR 26,747,897 29,325,128 Government Bond/
Corporate Bond
Total 26,747,897 29,325,128
Total Return Bond Fund
BNP Paribas EUR 9,520,617 10,030,335 Government Bond/
Corporate Bond
Credit Suisse EUR 713,418 782,159 Government Bond/
Corporate Bond
Goldman Sachs EUR 943,448 997,379 Government Bond
J P Morgan EUR 8,174,531 8,640,629 Government Bond/
Corporate Bond
Merrill Lynch EUR 70,713,559 74,438,380 Government Bond/Equity
Total 90,065,573 94,888,882
Asian Dividend Income Fund
Citigroup USD 5,726,307 6,034,847 Equity
HSBC USD 413,457 435,699 Government Bond/
Corporate Bond/Equity
Total 6,139,764 6,470,546
Asian Growth Fund
J P Morgan USD 339,501 357,885 Equity
Total 339,501 357,885
Euroland Fund
ABN Amro EUR 36,253,615 38,161,724 Equity
Citigroup EUR 2,862,603 3,013,660 Equity
HSBC EUR 22,088,213 23,253,786 Government Bond/
Corporate Bond/Equity
J P Morgan EUR 4,892,441 5,152,044 Equity
Morgan Stanley EUR 6,683,398 7,172,065 Government Bond/
Corporate Bond/Equity
Total 72,780,270 76,753,279
Notes to the Financial Statements (continued)
272
As at 30 June 2019
Fund Counterparty Ccy Total market
value of
securities on loan
Amount of
collateral
received
Type of collateral
European Growth Fund
Citigroup EUR 1,616,625 1,701,932 Equity
HSBC EUR 4,338,724 4,567,290 Government Bond/
Corporate Bond/Equity
Morgan Stanley EUR 3,167,432 3,399,007 Government Bond/
Corporate Bond/Equity
ABN Amro EUR 427,016 449,491 Equity
J P Morgan EUR 1,561,533 1,644,382 Equity
Total 11,111,330 11,762,102
Japan Opportunities Fund
Citigroup JPY 112,504,000 118,469,604 Equity
HSBC JPY 583,391,040 614,262,469 Government Bond/
Corporate Bond/Equity
Total 695,895,040 732,732,073
Pan European Equity Fund
ABN Amro EUR 21,626,479 22,764,744 Equity
HSBC EUR 9,675,365 10,185,446 Government Bond/
Corporate Bond/Equity
J P Morgan EUR 9,482,385 9,985,545 Equity
Morgan Stanley EUR 18,734,381 20,104,214 Government Bond/
Corporate Bond/Equity
Total 59,518,610 63,039,949
Asia-Pacifi c Property Equities
Fund
Citigroup USD 1,995,453 2,102,973 Equity
HSBC USD 2,814,023 2,965,272 Government Bond/
Corporate Bond/Equity
Total 4,809,476 5,068,245
Global Equity Income Fund
HSBC USD 61,827 65,154 Government Bond/
Corporate Bond/Equity
Total 61,827 65,154
Global Natural Resources Fund
HSBC USD 124,533 131,234 Government Bond/
Corporate Bond/Equity
Morgan Stanley USD 376,323 404,330 Government Bond/
Corporate Bond/Equity
Total 500,856 535,564
Global Property Equities Fund
J P Morgan USD 133 174 Equity
Merrill Lynch USD 15,603,650 16,442,730 Government Bond/Equity
Total 15,603,783 16,442,904
Notes to the Financial Statements (continued)
13. Securities Lending Activities (continued)
273
As at 30 June 2019
Fund Counterparty Ccy Total market
value of
securities on loan
Amount of
collateral
received
Type of collateral
Pan European Alpha Fund
HSBC EUR 18,376,465 19,347,166 Government Bond/
Corporate Bond/Equity
J P Morgan EUR 2,097,436 2,208,723 Equity
UBS EUR 116,200 147,197 Equity
Total 20,590,101 21,703,086
Pan European Property Equities
Fund
HSBC EUR 2,230,489 2,347,906 Government Bond/
Corporate Bond/Equity
Morgan Stanley EUR 3,640,402 3,906,568 Government Bond/
Corporate Bond/Equity
Total 5,870,891 6,254,474
For the year ending 30 June 2019 the total net income arising from the Securities lending is as follows:
Ccy Total gross
amount of
stock lending
revenue
Direct and indirect
costs and fees
deducted by
securities
lending agent
Net stock
lending revenue
retained by
the fund
Euro Corporate Bond Fund EUR 378,541 56,781 321,760
Euro High Yield Bond Fund EUR 172,253 25,838 146,415
Total Return Bond Fund EUR 183,111 27,467 155,644
Asian Dividend Income Fund USD 11,108 1,666 9,442
Asian Growth Fund USD 202 30 172
Euroland Fund EUR 293,615 44,042 249,573
European Growth Fund EUR 34,133 5,120 29,013
Japan Opportunities Fund JPY 1,057,938 158,691 899,247
Pan European Dividend Income Fund EUR 4 1 3
Pan European Equity Fund EUR 91,308 13,696 77,612
US Growth Fund USD 3,009 451 2,558
Asia-Pacifi c Property Equities Fund USD 15,424 2,314 13,110
China Fund USD 61,772 9,266 52,506
Global Equity Income Fund USD 152 23 129
Global Natural Resources Fund USD 3,287 493 2,794
Global Property Equities Fund USD 1,075 161 914
Pan European Alpha Fund EUR 124,669 18,700 105,969
Pan European Property Equities Fund EUR 23,875 3,581 20,294
Notes to the Financial Statements (continued)
13. Securities lending activities (continued)
274
As at 30 June 2019
14. Transactions with connected personsDuring the year under review, the following transactions were entered into by the funds with the following connected persons of the Company: (1) The Management Company – Note 6 documents the management fees and the performance fees relevant to each fund. The total amounts charged to the fund by the Management Company, Henderson Management SA, during the year in respect of these fees were USD 114,635,365 (June 2018: USD 155,745,965).
(2) The share class service fees paid to the Principal Distributor were up to 0.5% per annum of the average total net assets of the Regional and Specialist funds (except for Global Multi-Asset Fund) and 0.25% per annum for the Global Multi-Asset Fund and the Bond funds (excluding those assets attributable to shareholders of the Class B, Class C, Class E, Class G, Class I, Class IR Class IU, Class M, Class Q, Class R Class S, Class Z shares). The total amount charged to the funds by the Distributor during the year in respect of these fees was USD 32,498,837 (June 2018: USD 40,751,210).
Further, a Distribution fee on Class X shares at the annual rate of 0.6% per annum for the Regional and Specialist funds and 0.35%
per annum for the bond funds of the fund’s average daily net assets is payable to the Principal Distributor. The total amount paid by the
Company to the Principal Distributor during the year in respect of these fees was USD 1,039,413 (June 2018: USD 1,240,257).
(3) The Directors fees payable to the Directors were USD 158,217 (June 2018: USD 172,918).
15. Soft commission
The Investment Manager and where relevant, sub-investment managers, use investment research, both internally generated and externally
sourced, to inform their decision making.
The Investment Manager, and where relevant sub-investment managers, pay for investment research from their own resources
16. Withholding tax reclaims
Withholding tax reclaims (WHT) have been fi led in respect of WHT applied on Belgian, Danish, German, Italian and Spanish dividends during
the years 2003 to 2016. Claims received have been refl ected in the funds when they are received. Total outstanding reclaims are shown
below. The likely outcome of these reclaims cannot be assessed at the current point in time and consequently no amounts in respect of these
reclaims have been included in these fi nancial statements. The legal costs of pursuing these WHT reclaims will be borne by the funds. Should
all of the claims be successful, the eff ect on each of the impacted sub-funds (expressed in percentage of Net Assets as at 30 June 2019)
would be as follows:
Fund Total (EUR) % Weighting of Total Net Assets
Euroland Fund 2,022,553 0.16%
European Growth Fund 166,843 0.23%
Pan European Dividend Income Fund 2,051 0.04%
Pan European Equity Fund 11,795,394 2.10%
Global Equity Income Fund 2,142 0.04%
Global Natural Resources Fund 218 0.00%
Global Property Equities Fund 123,094 0.03%
Global Technology Fund 263,545 0.01%
Pan European Alpha Fund 989,683 0.20%
Pan European Property Equities Fund 562,875 0.16%
Pan European Smaller Companies Fund 2,182,359 0.35%
Funds closed
Pan European Equity Dividend Fund1 249,880 5.72%
Industries of the Future Fund2 3,602 0.13%
World Select Fund3 11,654 0.40%
1 Pan European Equity Dividend Fund is closed. The total assets used in the weighting percentage is as at 29 June 2012.2 Industries of the Future Fund is closed. The total net assets used in the weighting percentage is as at 31 January 2012.3 World Select Fund is closed. The total net assets used in the weighting percentage is as at 31 March 2017.
17. Purchases and Sales of Securities
A listing of purchases and sales of securities during the year is available upon request at the registered offi ce of the Company.
Notes to the Financial Statements (continued)
275
As at 30 June 2019
Fund Share Class TER - before
Performance fee
TER - after
Performance fee
Emerging Market Corporate Bond Fund A2 (USD) 1.23% 1.23%A2 HEUR (EUR) 1.23% 1.23%A3 HEUR (EUR) 1.19% 1.19%
To the Shareholders of Janus Henderson Horizon Fund
Our opinion
In our opinion, the accompanying financial statements give a true and fair view of the financial position of Janus Henderson Horizon Fund and of each of its sub-funds as at 30 June 201 ,and of the results of their operations and changes in their net assets for the year then ended inaccordance with Luxembourg legal and regulatory requirements relating to the preparation andpresentation of the financial statements.
What we have audited
The und’s financial statements comprise:
the notes to the financial statements, which include a summary of significant accounting policies.
Basis for opinion
We conducted our audit in accordance with the Law of 23 July 2016 on the audit profession (Law of 23 July 2016) and with International Standards on Auditing (ISAs) as adopted for Luxembourg bythe Commission de Surveillance du Secteur Financier (CSSF). Our responsibilities under
are further described in the“Responsibilities of the Réviseur d’entreprises agréé for the audit of the financial statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour opinion.
We are independent of the und in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code) as adopted for Luxembourg by the CSSF together with the ethical requirements that are relevant to our audit of the financial statements. We have fulfilled our other ethical responsibilities under those ethical requirements.
Other information
The Board of Directors of the und is responsible for the other information. The other information comprises the information stated in the nnual report but does not include the financial statements and our audit report thereon.
Our opinion on the financial statements does not cover the other information and we do not express anyform of assurance conclusion thereon.
289
In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Board of Directors of the und for the financial statements
The Board of Directors of the und is responsible for the preparation and fair presentation ofthe financial statements in accordance with Luxembourg legal and regulatory requirements relatingto the preparation and presentation of the financial statements, and for such internal control as the Board of Directors of the und determines is necessary to enable the preparation offinancial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Board of Directors of the und is responsible for assessingthe und’s ability to continue as a going concern, disclosing, asapplicable, matters related to going concern and using the going concern basis of accounting unless theBoard of Directors of the und either intends to liquidate the undor to cease operations, or has no realistic alternative but to do so.
Responsibilities of the Réviseur d’entreprises agréé for the audit of the financial statements
The objectives of our audit are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an audit report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Law of 23 July 2016 and with ISAs as adopted for Luxembourg by the CSSF will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with the Law of 23 July 2016 and with ISAs as adopted for Luxembourg by the CSSF, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
identify and assess the risks of material misstatement of the financial statements, whether due tofraud or error, design and perform audit procedures responsive to those risks, and obtain auditevidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detectinga material misstatement resulting from fraud is higher than for one resulting from error, as fraudmay involve collusion, forgery, intentional omissions, misrepresentations, or the override of internalcontrol;
obtain an understanding of internal control relevant to the audit in order to design audit proceduresthat are appropriate in the circumstances, but not for the purpose of expressing an opinion on theeffectiveness of the und’s internal control;
evaluate the appropriateness of accounting policies used and the reasonableness of accountingestimates and related disclosures made by the Board of Directors of the und;
}wc
conclude on the appropriateness of the Board of Directors of the Fund's use of the going concernbasis of accounting and, based on the audit evidence obtained, whether a material uncertainty existsrelated to events or conditions that may cast significant doubt on the Fund's ability or any of itssub-funds'to continue as a going concern. If we conclude that a material uncertainty exists, we arerequired to draw attention in our audit report to the related disclosures in the financial statementsor, if such disclosures are inadequate, to modifu our opinion. Our conclusions are based on theaudit evidence obtained up to the date of our audit report. However, future events or conditionsmay cause the Fund or any of its sub-funds (except for Janus Henderson Horizon Fund CoreCredit Fund and Janus Henderson Horizon Fund Global Corporate Bond Fund where a decision oran intention to liquidate exist) to cease to continue as a going concern;
evaluate the overall presentation, structure and content of the financial statements, including thedisclosures, and whether the financial statements represent the underlying transactions and eventsin a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the plannedscope and timing of the audit and significant audit findings, including any significant deficiencies ininternal control that we identify during our audit.
Luxembourg, z6 September 2o1gPricewaterhouseCoopers, Soci6t6 coop6rative
pwco conclude on the appropriateness of the Board of Directors of the Fund's use of the going concernbasis of accounting and, based on the audit evidence obtained, whether a material uncertainty existsrelated to events or conditions that may cast significant doubt on the Funds ability or any of itssub-funds’ to continue as a going concern. If we conclude that a material uncertainty exists, we arerequired to draw attention in our audit report to the related disclosures in the financial statementsor, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on theaudit evidence obtained up to the date of our audit report. However, future events or conditionsmay cause the Fund or any of its sub-funds (except for Janus Henderson Horizon Fund CoreCredit Fund and Janus Henderson Horizon Fund Global Corporate Bond Fund where a decision oran intention to liquidate exist) to cease to continue as a going concern;
0 evaluate the overall presentation, structure and content of the financial statements, including thedisclosures, and whether the financial statements represent the underlying transactions and eventsin a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the plannedscope and timing of the audit and significant audit findings, including any significant deficiencies ininternal control that we identify during our audit.
Pricewaterhousecoopers, Société coopérative Luxembourg, 26 September 2019' epresen - ~ b
290
291
As at 30 June 2019
Securities fi nancing transactions
The funds engages in securities fi nancing transactions (SFTs) (as defi ned in Article 3 of Regulation (EU) 2015/2365, securities fi nancing
transactions include repurchase transactions, securities or commodities lending and securities or commodities borrowing, buy-sell back
transactions or sell-buy back transactions and margin lending transactions). In accordance with Article 13 of the Regulation, the funds‘
involvement in and exposures related to securities lending for the year ended 30 June 2019 are detailed below.
Global Data
The table lists the amount of securities on loan as a proportion of total lendable assets and the funds‘ assets under management (AUM) as
at 30 June 2019:
Fund Market value of
securities on loan
(in fund currency)
% of lendable assets % of AUM
Euro Corporate Bond Fund 113,974,311 8.30% 8.09%
Euro High Yield Bond Fund 26,747,897 7.59% 7.00%
Total Return Bond Fund 90,065,573 12.44% 11.14%
Asian Dividend Income Fund 6,139,764 1.75% 1.74%
Asian Growth Fund 339,501 1.65% 1.57%
Euroland Fund 72,780,270 5.80% 5.67%
European Growth Fund 11,111,330 14.96% 15.07%
Japan Opportunities Fund 695,895,040 18.89% 18.47%
Pan European Equity Fund 59,518,610 10.63% 10.60%
Asia-Pacifi c Property Equities Fund 4,809,476 6.63% 6.17%
Global Equity Income Fund 61,827 0.96% 0.90%
Global Natural Resources Fund 500,856 6.77% 6.58%
Global Property Equities Fund 15,603,783 3.22% 3.11%
Pan European Alpha Fund 20,590,101 5.01% 4.14%
Pan European Property Equities Fund 5,870,891 1.70% 1.69%
The table lists the amount of total return swaps held as a proportion of total lendable assets and the fund‘s assets under management (AUM)
as at 30 June 2019:
Fund Market value of
total return swaps
(in fund currency)
% of lendable assets % of AUM
Euro Corporate Bond Fund 65,621 - -
Euro High Yield Bond Fund 81,522 0.02% 0.02%
Global High Yield Bond Fund 40,187 0.01% 0.01%
APPENDIX - additional information (unaudited)
292
As at 30 June 2019
Concentration Data
The following table lists the ten largest collateral issuers by value of collateral received (across all SFTs) for each fund as at 30 June 2019:
Issuer Market value of
collateral received
(in fund currency)
Issuer Market value of
collateral received
(in fund currency)
Euro Corporate Bond Fund Euro High Yield Bond Fund*
UK Treasury 41,014,763 European Investment Bank 27,471,089
Government of Germany 27,915,757 Inter-American Development Bank 1,824,607
International Bank for Reconstruction and Development 13,786,590 US Treasury 29,432
Government of Ireland 13,166,571
Kingdom of Netherlands 10,646,323
African Development Bank 8,475,445
IFC 1,948,886
Government of Norway 1,585,247
European Financial Stability Facility 1,308,250
European Bank for Reconstruction and Development 1,060,467
Total Return Bond Fund Asian Dividend Income Fund
Barclays 52,931,897 Banco Santander Central Hispano 5,284,496
Government of Germany 6,436,962 Caixabank 683,602
UBS 5,630,787 Atlantia 205,336
Kingdom of Netherlands 5,500,179 UBI Banca 102,609
US Treasury 4,306,754 BHP Group 68,293
Government of France 3,795,219 Unicredit 66,748
International Bank for Reconstruction and Development 3,161,638 Banco de Sabadell 16,887
Government of Ireland 3,036,018 Reed Elsevier 14,323
Société Générale 2,643,946 Royal Dutch Shell 9,538
African Development Bank 1,943,679 Nordea Bank 8,995
Asian Growth Fund* Euroland Fund
Intesa Sanpaolo 284,820 Royal Dutch Shell 23,293,105
Assicurazioni Generali 73,065 Atlantia 10,939,455
Government of Japan 6,183,618
UBI Banca 5,476,058
Zurich Insurance 5,088,190
Intesa Sanpaolo 4,100,142
Koninklijke Philips 3,940,790
BHP Group 3,645,455
Banco Santander Central Hispano 2,638,959
Amadeus IT Holdings 2,003,155
APPENDIX - additional information (unaudited) (continued)
* All issuers have been included.
293
As at 30 June 2019
Issuer Market value of
collateral received
(in fund currency)
Issuer Market value of
collateral received
(in fund currency)
European Growth Fund Japan Opportunities Fund
Government of Japan 2,930,573 Atlantia 288,992,847
Atlantia 2,148,802 UBI Banca 144,664,427
Banco Santander Central Hispano 1,490,321 Banco Santander Central Hispano 103,737,218
Intesa Sanpaolo 1,308,652 BHP Group 96,302,969
UBI Banca 1,075,646 Banco de Sabadell 23,808,550
BHP Group 716,060 Reed Elsevier 20,204,895
Royal Dutch Shell 369,423 Royal Dutch Shell 13,479,124
Assicurazioni Generali 2,038,770 Royal Dutch Shell 65,056
BHP Group 1,596,808 Nordea Bank 61,229
Alberta 1,344,984 Unicredit 23,261
Global Equity Income Fund Global Natural Resources Fund
Atlantia 30,951 Government of Japan 348,545
UBI Banca 15,342 Atlantia 61,953
BHP Group 10,204 UBI Banca 30,904
Banco de Sabadell 2,525 Alberta 27,046
Reed Elsevier 2,140 Manitoba 23,137
Royal Dutch Shell 1,414 BHP Group 20,562
Nordea Bank 1,342 Banco de Sabadell 5,086
UK Treasury 476 Tosoh 4,532
Unilever 247 Reed Elsevier 4,304
Aena 196 Royal Dutch Shell 2,861
APPENDIX - additional information (unaudited) (continued)
Concentration Data (continued)
294
As at 30 June 2019
Issuer Market value of
collateral received
(in fund currency)
Issuer Market value of
collateral received
(in fund currency)
Global Property Equities Fund Pan European Alpha Fund
Barclays 11,692,106 Atlantia 9,100,437
UBS 1,243,790 UBI Banca 4,555,862
US Treasury 951,143 BHP Group 3,032,963
Government of France 838,324 Intesa Sanpaolo 1,757,768
Kingdom of Netherlands 675,630 Banco de Sabadell 749,792
Société Générale 584,044 Reed Elsevier 636,362
Government of Japan 315,566 Assicurazioni Generali 450,954
Vinci 141,777 Royal Dutch Shell 424,754
Safran 292 Nordea Bank 399,482
Intesa Sanpaolo 118 UK Treasury 141,528
Pan European Property Equities Fund
Government of Japan 3,368,175
Atlantia 1,104,698
UBI Banca 552,977
BHP Group 368,105
Alberta 261,352
Manitoba 223,566
Banco de Sabadell 91,007
Reed Elsevier 77,233
Royal Dutch Shell 51,491
Nordea Bank 48,492
Total Return Swaps
Euro Corporate Bond Fund
Euro High Yield Bond Fund
Global High Yield Bond Fund
The funds do not hold specifi c collateral in relation to the total return swaps as all derivative positions that are held by the fund are collateralised
on a net exposure basis.
APPENDIX - additional information (unaudited) (continued)
Concentration Data (continued)
295
As at 30 June 2019
Concentration Data (continued)
The following table details the top ten counterparties of each type of SFTs (based on gross volume of outstanding transactions), for each
fund as at 30 June 2019:
Counterparty Market value of
securities on loan
(in fund currency)
Settlement
basis
Counterparty Market value of
securities on loan
(in fund currency)
Settlement
basis
Euro Corporate Bond Fund Euro High Yield Bond Fund
J P Morgan 339,501 Triparty ABN Amro 36,253,615 Triparty339,501 HSBC 22,088,213 Triparty
Morgan Stanley 6,683,398 TripartyJ P Morgan 4,892,441 TripartyCitigroup 2,862,603 Triparty
72,780,270
European Growth Fund Japan Opportunities Fund
HSBC 4,338,724 Triparty HSBC 583,391,040 TripartyMorgan Stanley 3,167,432 Triparty Citigroup 112,504,000 TripartyCitigroup 1,616,625 Triparty 695,895,040J P Morgan 1,561,533 TripartyABN Amro 427,016 Triparty
11,111,330
Pan European Equity Fund Asia-Pacifi c Property Equities Fund
ABN Amro 21,626,479 Triparty HSBC 2,814,023 TripartyMorgan Stanley 18,734,381 Triparty Citigroup 1,995,453 TripartyHSBC 9,675,365 Triparty 4,809,476J P Morgan 9,482,385 Triparty
59,518,610
Global Equity Income Fund Global Natural Resources Fund
HSBC 61,827 Triparty Morgan Stanley 376,323 Triparty61,827 HSBC 124,533 Triparty
500,856
Global Property Equities Fund Pan European Alpha Fund
Merrill Lynch 15,603,650 Triparty HSBC 18,376,465 TripartyJ P Morgan 133 Triparty J P Morgan 2,097,436 Triparty
15,603,783 UBS 116,200 Triparty20,590,101
APPENDIX - additional information (unaudited) (continued)
296
As at 30 June 2019
Counterparty Market value of
securities on loan
(in fund currency)
Settlement
basis
Counterparty Market value of
securities on loan
(in fund currency)
Settlement
basis
Pan European Property Equities Fund
Morgan Stanley 3,640,402 TripartyHSBC 2,230,489 Triparty
5,870,891
Total Return Swaps
Counterparty Market value of
total return swaps
(in fund currency)
Settlement
basis
Euro Corporate Bond Fund
JP Morgan 65,621 Bilateral
Euro High Yield Bond Fund
Citigroup (9,787) Bilateral
JP Morgan 91,309 Bilateral
Global High Yield Bond Fund
JP Morgan 40,187 Bilateral
All counterparties have been included.
Aggregate transaction data
The following tables provide an analysis of the collateral received by each fund in respect of each type of SFTs as at 30 June 2019:
Counterparty Counterparty
country of origin
Type Quality Collateral
Currency
Settlement
basis
Custodian Market value
of collateral
received (in
fund currency)
Euro Corporate Bond Fund
ABN Amro Netherlands Equity Main market listing CHF Triparty BNP Paribas 170,173
ABN Amro Netherlands Equity Main market listing EUR Triparty BNP Paribas 856,132
ABN Amro Netherlands Equity Main market listing GBP Triparty BNP Paribas 11,170
ABN Amro Netherlands Equity Main market listing USD Triparty BNP Paribas 39,200
Barclays United Kingdom Corporate Bond Investment grade EUR Triparty BNP Paribas 20,977
Barclays United Kingdom Corporate Bond Investment grade INR Triparty BNP Paribas 41,396
Barclays United Kingdom Government Bond Investment grade GBP Triparty BNP Paribas 24,149,730
BNP Paribas France Corporate Bond Investment grade EUR Triparty BNP Paribas 1,308,250
BNP Paribas France Corporate Bond Investment grade JPY Triparty BNP Paribas 760,362
BNP Paribas France Corporate Bond Investment grade USD Triparty BNP Paribas 324,293
BNP Paribas France Corporate Bond Investment grade NZD Triparty BNP Paribas 24,228
BNP Paribas France Government Bond Investment grade EUR Triparty BNP Paribas 41,082,328
Citigroup United States Government Bond Investment grade GBP Non Cash BNP Paribas 11,160,431
Goldman Sachs United States Government Bond Investment grade GBP Triparty BNP Paribas 5,661,819
J P Morgan United States Corporate Bond Investment grade MXN Triparty BNP Paribas 1,024,770
APPENDIX - additional information (unaudited) (continued)
Concentration Data (continued)
297
As at 30 June 2019
Counterparty Counterparty
country of origin
Type Quality Collateral
Currency
Settlement
basis
Custodian Market value
of collateral
received (in
fund currency)
Euro Corporate Bond Fund (continued)
J P Morgan United States Corporate Bond Investment grade ARS Triparty BNP Paribas 390,165
J P Morgan United States Corporate Bond Investment grade UYU Triparty BNP Paribas 71,115
J P Morgan United States Corporate Bond Investment grade ZAR Triparty BNP Paribas 47,335
J P Morgan United States Corporate Bond Investment grade KZT Triparty BNP Paribas 3,187,971
J P Morgan United States Corporate Bond Investment grade INR Triparty BNP Paribas 46,014
J P Morgan United States Corporate Bond Investment grade ZMW Triparty BNP Paribas 9,360,665
J P Morgan United States Corporate Bond Investment grade PLN Triparty BNP Paribas 1,316,097
J P Morgan United States Corporate Bond Investment grade NGN Triparty BNP Paribas 7,991,040
J P Morgan United States Corporate Bond Investment grade UGX Triparty BNP Paribas 1,258,815
J P Morgan United States Corporate Bond Investment grade HUF Triparty BNP Paribas 528,884
J P Morgan United States Corporate Bond Investment grade IDR Triparty BNP Paribas 180,969
J P Morgan United States Government Bond Investment grade EUR Triparty BNP Paribas 10,646,323
J P Morgan United States Government Bond Investment grade GBP Triparty BNP Paribas 42,783
J P Morgan United States Government Bond Investment grade NOK Triparty BNP Paribas 1,585,246
Credit Suisse Switzerland Government Bond Investment grade USD Triparty BNP Paribas 785
Goldman Sachs United States Government Bond Investment grade GBP Triparty BNP Paribas 997,379
J P Morgan United States Corporate Bond Investment grade MXN Triparty BNP Paribas 235,008
J P Morgan United States Corporate Bond Investment grade ARS Triparty BNP Paribas 89,475
J P Morgan United States Corporate Bond Investment grade UYU Triparty BNP Paribas 16,309
J P Morgan United States Corporate Bond Investment grade ZAR Triparty BNP Paribas 10,855
J P Morgan United States Corporate Bond Investment grade KZT Triparty BNP Paribas 731,088
J P Morgan United States Corporate Bond Investment grade INR Triparty BNP Paribas 10,552
J P Morgan United States Corporate Bond Investment grade ZMW Triparty BNP Paribas 2,146,654
J P Morgan United States Corporate Bond Investment grade PLN Triparty BNP Paribas 301,816
J P Morgan United States Corporate Bond Investment grade NGN Triparty BNP Paribas 1,832,562
J P Morgan United States Corporate Bond Investment grade UGX Triparty BNP Paribas 288,680
J P Morgan United States Corporate Bond Investment grade HUF Triparty BNP Paribas 121,287
APPENDIX - additional information (unaudited) (continued)
298
As at 30 June 2019
Counterparty Counterparty
country of origin
Type Quality Collateral
Currency
Settlement
basis
Custodian Market value
of collateral
received (in
fund currency)
Total Return Bond Fund (continued)
J P Morgan United States Corporate Bond Investment grade IDR Triparty BNP Paribas 41,501
J P Morgan United States Government Bond Investment grade EUR Triparty BNP Paribas 2,441,490
J P Morgan United States Government Bond Investment grade GBP Triparty BNP Paribas 9,812
J P Morgan United States Government Bond Investment grade NOK Triparty BNP Paribas 363,540
Merrill Lynch United States Equity Main market listing CHF Triparty BNP Paribas 5,630,787
Merrill Lynch United States Equity Main market listing EUR Triparty BNP Paribas 3,286,972
Merrill Lynch United States Equity Main market listing GBP Triparty BNP Paribas 52,932,108
Merrill Lynch United States Equity Main market listing SEK Triparty BNP Paribas 25
Merrill Lynch United States Government Bond Investment grade EUR Triparty BNP Paribas 6,853,908
Merrill Lynch United States Government Bond Investment grade JPY Triparty BNP Paribas 1,428,612
Merrill Lynch United States Government Bond Investment grade USD Triparty BNP Paribas 4,305,968
94,888,882
Asian Dividend Income Fund
Citigroup United States Equity Main market listing EUR Triparty BNP Paribas 6,034,847
HSBC United Kingdom Corporate Bond Investment grade EUR Triparty BNP Paribas 1,043
HSBC United Kingdom Equity Main market listing EUR Triparty BNP Paribas 326,981
HSBC United Kingdom Equity Main market listing GBP Triparty BNP Paribas 95,493
HSBC United Kingdom Equity Main market listing SEK Triparty BNP Paribas 8,995
HSBC United Kingdom Government Bond Investment grade GBP Triparty BNP Paribas 3,187
6,470,546
Asian Growth Fund
J P Morgan United States Equity Main market listing EUR Triparty BNP Paribas 357,885
357,885
Euroland Fund
ABN Amro Netherlands Equity Main market listing CHF Triparty BNP Paribas 6,041,482
ABN Amro Netherlands Equity Main market listing EUR Triparty BNP Paribas 30,534,829
ABN Amro Netherlands Equity Main market listing GBP Triparty BNP Paribas 396,157
ABN Amro Netherlands Equity Main market listing USD Triparty BNP Paribas 1,189,256
Citigroup United States Equity Main market listing EUR Triparty BNP Paribas 3,013,660
HSBC United Kingdom Corporate Bond Investment grade EUR Triparty BNP Paribas 55,697
HSBC United Kingdom Equity Main market listing EUR Triparty BNP Paribas 17,441,854
HSBC United Kingdom Equity Main market listing GBP Triparty BNP Paribas 5,102,889
HSBC United Kingdom Equity Main market listing USD Triparty BNP Paribas 3,084
HSBC United Kingdom Equity Main market listing SEK Triparty BNP Paribas 480,138
HSBC United Kingdom Government Bond Investment grade GBP Triparty BNP Paribas 170,124
J P Morgan United States Equity Main market listing EUR Triparty BNP Paribas 5,152,044
Morgan Stanley United Kingdom Corporate Bond Investment grade CAD Triparty BNP Paribas 890,259
Morgan Stanley United Kingdom Equity Main market listing JPY Triparty BNP Paribas 98,188
Morgan Stanley United Kingdom Government Bond Investment grade JPY Triparty BNP Paribas 6,183,618
76,753,279
APPENDIX - additional information (unaudited) (continued)
Aggregate transaction data (continued)
299
As at 30 June 2019
Counterparty Counterparty
country of origin
Type Quality Collateral
Currency
Settlement
basis
Custodian Market value
of collateral
received (in
fund currency)
European Growth Fund
ABN Amro Netherlands Equity Main market listing CHF Triparty BNP Paribas 71,838
ABN Amro Netherlands Equity Main market listing EUR Triparty BNP Paribas 360,380
ABN Amro Netherlands Equity Main market listing GBP Triparty BNP Paribas 4,665
ABN Amro Netherlands Equity Main market listing USD Triparty BNP Paribas 12,608
Citigroup United States Equity Main market listing EUR Triparty BNP Paribas 1,701,932
HSBC United Kingdom Corporate Bond Investment grade EUR Triparty BNP Paribas 10,939
HSBC United Kingdom Equity Main market listing EUR Triparty BNP Paribas 3,425,902
HSBC United Kingdom Equity Main market listing GBP Triparty BNP Paribas 1,002,164
HSBC United Kingdom Equity Main market listing USD Triparty BNP Paribas 561
HSBC United Kingdom Equity Main market listing SEK Triparty BNP Paribas 94,311
HSBC United Kingdom Government Bond Investment grade GBP Triparty BNP Paribas 33,413
J P Morgan United States Equity Main market listing EUR Triparty BNP Paribas 1,644,382
Morgan Stanley United Kingdom Corporate Bond Investment grade CAD Triparty BNP Paribas 421,917
Morgan Stanley United Kingdom Equity Main market listing JPY Triparty BNP Paribas 46,517
Morgan Stanley United Kingdom Government Bond Investment grade JPY Triparty BNP Paribas 2,930,573
11,762,102
Japan Opportunities Fund
Citigroup United States Equity Main market listing EUR Triparty BNP Paribas 118,469,604
HSBC United Kingdom Corporate Bond Investment grade EUR Triparty BNP Paribas 1,471,348
HSBC United Kingdom Equity Main market listing EUR Triparty BNP Paribas 460,758,684
HSBC United Kingdom Equity Main market listing GBP Triparty BNP Paribas 134,777,668
HSBC United Kingdom Equity Main market listing USD Triparty BNP Paribas 77,324
HSBC United Kingdom Equity Main market listing SEK Triparty BNP Paribas 12,683,455
HSBC United Kingdom Government Bond Investment grade GBP Triparty BNP Paribas 4,493,990
732,732,073
Pan European Equity Fund
ABN Amro Netherlands Equity Main market listing CHF Triparty BNP Paribas 3,603,765
ABN Amro Netherlands Equity Main market listing EUR Triparty BNP Paribas 18,216,230
ABN Amro Netherlands Equity Main market listing GBP Triparty BNP Paribas 236,324
ABN Amro Netherlands Equity Main market listing USD Triparty BNP Paribas 708,425
HSBC United Kingdom Corporate Bond Investment grade EUR Triparty BNP Paribas 24,396
HSBC United Kingdom Equity Main market listing EUR Triparty BNP Paribas 7,639,978
HSBC United Kingdom Equity Main market listing GBP Triparty BNP Paribas 2,234,911
HSBC United Kingdom Equity Main market listing USD Triparty BNP Paribas 1,332
HSBC United Kingdom Equity Main market listing SEK Triparty BNP Paribas 210,313
HSBC United Kingdom Government Bond Investment grade GBP Triparty BNP Paribas 74,516
J P Morgan United States Equity Main market listing EUR Triparty BNP Paribas 9,985,545
Morgan Stanley United Kingdom Corporate Bond Investment grade CAD Triparty BNP Paribas 2,495,509
Morgan Stanley United Kingdom Equity Main market listing JPY Triparty BNP Paribas 275,268
Morgan Stanley United Kingdom Government Bond Investment grade JPY Triparty BNP Paribas 17,333,437
63,039,949
APPENDIX - additional information (unaudited) (continued)
Aggregate transaction data (continued)
300
As at 30 June 2019
Counterparty Counterparty
country of origin
Type Quality Collateral
Currency
Settlement
basis
Custodian Market value
of collateral
received (in
fund currency)
Asia-Pacifi c Property Equities Fund
Citigroup United States Equity Main market listing EUR Triparty BNP Paribas 2,102,973
HSBC United Kingdom Corporate Bond Investment grade EUR Triparty BNP Paribas 7,103
HSBC United Kingdom Equity Main market listing EUR Triparty BNP Paribas 2,224,327
HSBC United Kingdom Equity Main market listing GBP Triparty BNP Paribas 650,601
HSBC United Kingdom Equity Main market listing USD Triparty BNP Paribas 319
HSBC United Kingdom Equity Main market listing SEK Triparty BNP Paribas 61,229
HSBC United Kingdom Government Bond Investment grade GBP Triparty BNP Paribas 21,693
5,068,245
Global Equity Income Fund
HSBC United Kingdom Corporate Bond Investment grade EUR Triparty BNP Paribas 155
HSBC United Kingdom Equity Main market listing EUR Triparty BNP Paribas 49,041
HSBC United Kingdom Equity Main market listing GBP Triparty BNP Paribas 14,140
HSBC United Kingdom Equity Main market listing SEK Triparty BNP Paribas 1,342
HSBC United Kingdom Government Bond Investment grade GBP Triparty BNP Paribas 476
65,154
Global Natural Resources Fund
HSBC United Kingdom Corporate Bond Investment grade EUR Triparty BNP Paribas 314
HSBC United Kingdom Equity Main market listing EUR Triparty BNP Paribas 98,586
HSBC United Kingdom Equity Main market listing GBP Triparty BNP Paribas 28,670
HSBC United Kingdom Equity Main market listing SEK Triparty BNP Paribas 2,705
HSBC United Kingdom Government Bond Investment grade GBP Triparty BNP Paribas 959
Morgan Stanley United Kingdom Corporate Bond Investment grade CAD Triparty BNP Paribas 50,183
Morgan Stanley United Kingdom Equity Main market listing JPY Triparty BNP Paribas 5,602
Morgan Stanley United Kingdom Government Bond Investment grade JPY Triparty BNP Paribas 348,545
535,564
Global Property Equities Fund
J P Morgan United States Equity Main market listing EUR Triparty BNP Paribas 174
Merrill Lynch United States Equity Main market listing CHF Triparty BNP Paribas 1,243,790
Merrill Lynch United States Equity Main market listing EUR Triparty BNP Paribas 726,114
Merrill Lynch United States Equity Main market listing GBP Triparty BNP Paribas 11,692,154
Merrill Lynch United States Equity Main market listing SEK Triparty BNP Paribas 9
Merrill Lynch United States Government Bond Investment grade EUR Triparty BNP Paribas 1,513,954
Merrill Lynch United States Government Bond Investment grade JPY Triparty BNP Paribas 315,566
Merrill Lynch United States Government Bond Investment grade USD Triparty BNP Paribas 951,143
16,442,904
APPENDIX - additional information (unaudited) (continued)
Aggregate transaction data (continued)
301
As at 30 June 2019
Counterparty Counterparty
country of origin
Type Quality Collateral
Currency
Settlement
basis
Custodian Market value
of collateral
received (in
fund currency)
Pan European Alpha Fund
HSBC United Kingdom Corporate Bond Investment grade EUR Triparty BNP Paribas 46,343
HSBC United Kingdom Equity Main market listing EUR Triparty BNP Paribas 14,511,215
HSBC United Kingdom Equity Main market listing GBP Triparty BNP Paribas 4,245,655
HSBC United Kingdom Equity Main market listing USD Triparty BNP Paribas 2,944
HSBC United Kingdom Equity Main market listing SEK Triparty BNP Paribas 399,482
HSBC United Kingdom Government Bond Investment grade GBP Triparty BNP Paribas 141,527
J P Morgan United States Equity Main market listing EUR Triparty BNP Paribas 2,208,723
UBS United Kingdom Equity Main market listing CHF Triparty BNP Paribas 27,942
UBS United Kingdom Equity Main market listing HKD Triparty BNP Paribas 95,308
UBS United Kingdom Equity Main market listing SGD Triparty BNP Paribas 23,947
21,703,086
Pan European Property Equities Fund
HSBC United Kingdom Corporate Bond Investment grade EUR Triparty BNP Paribas 5,624
HSBC United Kingdom Equity Main market listing EUR Triparty BNP Paribas 1,761,268
HSBC United Kingdom Equity Main market listing GBP Triparty BNP Paribas 515,064
HSBC United Kingdom Equity Main market listing USD Triparty BNP Paribas 280
HSBC United Kingdom Equity Main market listing SEK Triparty BNP Paribas 48,492
HSBC United Kingdom Government Bond Investment grade GBP Triparty BNP Paribas 17,178
Morgan Stanley United Kingdom Corporate Bond Investment grade CAD Triparty BNP Paribas 484,918
Morgan Stanley United Kingdom Equity Main market listing JPY Triparty BNP Paribas 53,475
Morgan Stanley United Kingdom Government Bond Investment grade JPY Triparty BNP Paribas 3,368,175
6,254,474
The lending and collateral transactions are on an open basis and can be recalled on demand.
APPENDIX - additional information (unaudited) (continued)
Aggregate transaction data (continued)
302
As at 30 June 2019
Maturity Tenor
of Collateral
(remaining period
to maturity)
Less than
one day
Amount of
Collateral
(in fund
currency)
One day to
one week
Amount of
Collateral
(in fund
currency)
One week to
one month
Amount of
Collateral
(in fund
currency)
One to
three
months
Amount of
Collateral
(in fund
currency)
Three months
to one year
Amount of
Collateral
(in fund
currency)
Above
one year
Amount of
Collateral
(in fund
currency)
Open
maturity
Amount of
Collateral
(in fund
currency)
Total
Amount of
Collateral
(in fund
currency)
Euro Corporate Bond Fund - - 7,375,873 - 12,068,231 102,767,902 1,076,675 123,288,681 Euro High Yield Bond Fund - - 1,824,607 - - 27,500,521 - 29,325,128 Total Return Bond Fund - - 1,740,153 - 6,046,695 25,252,142 61,849,892 94,888,882 Asian Dividend Income Fund - - - - - 4,230 6,466,316 6,470,546 Asian Growth Fund - - - - - - 357,885 357,885 Euroland Fund - - - - 2,108,691 5,191,006 69,453,582 76,753,279 European Growth Fund - - - - 999,362 2,397,481 8,365,259 11,762,102 Japan Opportunities Fund - - - - - 5,965,338 726,766,735 732,732,073 Pan European Equity Fund - - - - 5,910,918 14,016,940 43,112,091 63,039,949 Asia-Pacifi c Property Equities Fund
- - - - - 28,795 5,039,450 5,068,245
Global Equity Income Fund - - - - - 632 64,522 65,154 Global Natural Resources Fund
- - - - 118,858 281,143 135,563 535,564
Global Property Equities Fund - - - - 721,983 2,058,680 13,662,241 16,442,904 Pan European Alpha Fund - - - - - 187,870 21,515,216 21,703,086 Pan European Property Equities Fund
- - - - 1,148,590 2,727,305 2,378,579 6,254,474
Total Return Swaps
The total return swaps held by Euro Corporate Bond, Euro High Yield Bond and Global High Yield Bond funds are due to mature in less
than six months.
The funds do not hold specifi c collateral in relation to the total return swaps as all derivative positions that are held by the funds are
collateralised on a net exposure basis.
All collateral is held in segregated accounts.
Re-use of collateral
The funds do not engage in any re-use of collateral.
APPENDIX - additional information (unaudited) (continued)
303
As at 30 June 2019
Return and cost on securities lending activities
The following table details the funds‘ return and costs for each type of SFTs for the year ending 30 June 2019:
Fund Total gross
amount of stock
lending revenue
(in fund
currency)
Direct and
indirect costs
and fees
deducted by
securities
lending agent
(in fund
currency)
Net stock
lending revenue
retained by
the fund
(in fund
currency)
% return
of the
securities
lending
agent
% return
of the fund
Securities lending
Euro Corporate Bond Fund 378,541 56,781 321,760 15% 85%
Euro High Yield Bond Fund 172,253 25,838 146,415 15% 85%
Total Return Bond Fund 183,111 27,467 155,644 15% 85%
Asian Dividend Income Fund 11,108 1,666 9,442 15% 85%
Asian Growth Fund 202 30 172 15% 85%
Euroland Fund 293,615 44,042 249,573 15% 85%
European Growth Fund 34,133 5,120 29,013 15% 85%
Japan Opportunities Fund 1,057,938 158,691 899,247 15% 85%
Pan European Dividend Income Fund 4 1 3 15% 85%
Pan European Equity Fund 91,308 13,696 77,612 15% 85%
US Growth Fund 3,009 451 2,558 15% 85%
Asia-Pacifi c Property Equities Fund 15,424 2,314 13,110 15% 85%
China Fund 61,772 9,266 52,506 15% 85%
Global Equity Income Fund 152 23 129 15% 85%
Global Natural Resources Fund 3,287 493 2,794 15% 85%
Global Property Equities Fund 1,075 161 914 15% 85%
Pan European Alpha Fund 124,669 18,700 105,969 15% 85%
Pan European Property Equities Fund 23,875 3,581 20,294 15% 85%
Total Return Swaps
Fund Total gross
amount of total
return swap
revenue
(in fund
currency)
Direct and
indirect costs
and fees
deducted by
counterparty
(in fund
currency)
Net total return
swap revenue
retained by
the fund
(in fund
currency)
% return
of the
counterparty
% return
of the fund
Euro Corporate Bond Fund 6,835 - 6,835 0% 100%
Euro High Yield Bond Fund 3,081 - 3,081 0% 100%
Global High Yield Bond Fund 2,012 - 2,012 0% 100%
APPENDIX - additional information (unaudited) (continued)
304
As at 30 June 2019
Risk policies
The Management Company employs a risk management process that identifi es the risks to which the individual funds and the Company
taken as a whole are or might be exposed and how such risks are assessed, monitored and managed, ensuring compliance with relevant
regulation. This enables it to monitor and measure at any time the risk of the portfolio positions and their contribution to the overall risk
profi le of the relevant fund, thereby ensuring that the global exposure of the underlying assets, including derivative instruments, shall
not exceed the total net value of the relevant fund. In accordance with the Law of 17 December 2010 and the applicable regulatory
requirements of the Commission de Surveillance du Secteur Financier (CSSF) the Management Company reports to the CSSF on a
regular basis on the risk management process on behalf of the Company.
Method
The global exposure of a fund is calculated by using either the commitment approach or value-at-risk approach by reference to its risk
profi le. The commitment approach means that fi nancial derivative instruments are converted into the market value of the equivalent position
in the underlying asset(s). Value-at-Risk (VaR) is a mathematical-statistical concept and is commonly used as a standard measure of risk
in the fi nancial sector. The VaR approach is used, in general, for funds using derivative instruments or techniques within their investment
strategies to generate additional leverage or market risk exposure.
Funds using the VaR approach
For such funds, the maximum potential loss that a fund could suff er in normal market conditions within a given time horizon and a certain
degree of confi dence is estimated. In these calculations all positions in the relevant portfolio are taken into consideration including those
undertaken for effi cient portfolio management purposes. For the purpose of calculating global exposure by VaR either a relative VaR
approach or absolute VaR approach can be used; the selection of relative or absolute VaR methodology is determined by the availability of
a reference portfolio appropriate for a fund in meeting its investment objective.
VaR model
VaR has been calculated using a Monte Carlo simulation approach. As a control mechanism, Monte Carlo results are compared to the
parametric model for validation purposes within the daily monitoring process.
Parameters
The following parameters are applied as a minimum: a one-tailed 99% confi dence interval, a holding period equivalent to one month
(20 business days), eff ective observation period (history) of risk factors of at least 1 year (250 business days), quarterly data set updates
and daily calculation.
Limits
For funds which have a suitable reference portfolio, the regulatory limit is that the VaR of the total portfolio’s positions shall not be greater
than twice the VaR of the portfolio’s reference portfolio.
For those funds which are unable or for which it is not appropriate to determine a reference portfolio (e.g. absolute return type funds) an absolute
VaR is calculated on all of the portfolio’s positions. Absolute monthly VaR on such funds is not to exceed a regulatory maximum threshold of 20%.
The VaR method, limits and utilisation of those limits for the year from 1 July 2018 to 30 June 2019 are summarised in the table below:
VaR Results - for the year ended 30 June 2019
Sub-Fund Global Exposure
Calculation basis
Reference Portfolio Actual VaR in year VaR Limit Utilisation of VaR Limit
Relative VaR BofA Merrill Lynch European Currency Non-Financial High Yield Constrained Index
78.04% 110.53% 94.70% 200% 39.02% 55.27% 47.35%
Global Corporate Bond Fund**
Relative VaR Barclays Global Aggregate Index
4.51% 126.11% 109.36% 200% 2.26% 63.06% 54.68%
Global High Yield Bond Fund
Relative VaR BofA Merrill Lynch Global High Yield Constrained Index
90.21% 117.40% 103.85% 200% 45.11% 58.70% 51.92%
APPENDIX - additional information (unaudited) (continued)
305
As at 30 June 2019
Sub-Fund Global Exposure
Calculation basis
Reference Portfolio Actual VaR in year VaR Limit Utilisation of VaR Limit
Minimum Maximum Average Minimum Maximum Average
Strategic Bond Fund
Absolute VaR n/a 1.23% 2.26% 1.81% 20% 6.16% 11.29% 9.04%
Total Return Bond Fund
Absolute VaR n/a 0.82% 1.85% 1.27% 20% 4.10% 9.23% 6.35%
China Fund Relative VaR MSCI China Index 75.91% 102.02% 90.61% 200% 37.96% 51.01% 45.31%
Pan European Alpha Fund
Absolute VaR n/a 1.28% 7.34% 2.58% 20% 6.41% 36.69% 12.89%
* The fund closed on 11 July 2018.** The fund closed on 28 February 2019.
LeverageFor those funds measuring and monitoring global exposure using the VaR approach, the level of leverage arising from the use of derivative instruments is disclosed in the table below as a percentage of each fund’s total Net Asset Value. The calculation is based on the sum of notional exposures of fi nancial derivative instruments in the investment portfolio including those held for risk reduction purposes. Please note this level of leverage is explicitly not an investment limit for the relevant fund and will vary over time under diff ering market conditions to ensure that the relevant fund meets its investment objective.
Leverage - for the year ended 30 June 2019
Sub-Fund Leverage
Minimum Maximum Average
Core Credit Fund* 22.52% 23.06% 22.84%
China Fund 35.63% 54.84% 44.23%
Euro Corporate Bond Fund 22.98% 53.38% 33.80%
Euro High Yield Bond Fund 39.95% 130.83% 73.32%
Global Corporate Bond Fund** 50.79% 154.99% 82.45%
Global High Yield Bond Fund 39.95% 130.85% 73.32%
Pan European Alpha Fund 78.90% 273.57% 117.62%
Strategic Bond Fund 61.23% 201.54% 114.40%
Total Return Bond Fund 234.42% 564.91% 379.20%
* The fund closed on 11 July 2018.
** The fund closed on 28 February 2019.
Funds using the Commitment Approach
The global exposure for those funds not specifi ed in the table above has been determined according to the commitment approach during
the reporting year from 1 July 2018 to 30 June 2019. For such funds, each fund’s total commitment to derivatives is limited to 100% of the
relevant fund’s total net value, being quantifi ed as the sum as an absolute value of the individual commitments, after consideration of the
possible eff ects of appropriate netting and hedging arrangements.
APPENDIX - additional information (unaudited) (continued)
306
As at 30 June 2019
Following the implementation of the UCITS V Directive in the UK from 18 March 2016, all authorised UCITS Management Companies are
required to comply with the UCITS Remuneration Code. Under the Code, the Compensation Committee of Janus Henderson Group plc
in its oversight of Henderson Global Investors Limited (HIGL) must make relevant remuneration disclosures.
The disclosures must split remuneration between fi xed and variable remuneration and must break down remuneration for categories of
UCITS Code Staff (defi ned as all staff whose professional activities have a material impact on the risk profi les of the funds it manages).
The Janus Henderson Group plc Compensation Committee approves the list of UCITS Code Staff annually. In addition, identifi ed UCITS
Code Staff are notifi ed of their status and the associated implications annually.
Janus Henderson Horizon Fund is managed by Henderson Management SA (the ‘Management Company’) which has delegated asset
management activities to Henderson Global Investors Limited, which is a subsidiary of Janus Henderson Group plc.
The Compensation Committee of Janus Henderson Group plc has established a Remuneration Policy, one of the guiding principles of
which is to ensure that the remuneration of its employees is consistent with and promotes sound and eff ective risk management and does
not encourage risk-taking which is inconsistent with the risk profi les and required regulations the Management Company and the funds it
manages operates under. This policy applies to HIGL and Janus Henderson Horizon Fund.
Further information on the Janus Henderson Group plc Remuneration Policy is available in the Janus Henderson Group plc annual report as
at 31 December 2018.
Headcount (1) Total Remuneration
(£’000) (2,3)
Emerging Market Corporate Bond Fund
Emerging Market Corporate Bond Fund 1,953 745
of which
Fixed Remuneration 1,953 208
Variable Remuneration 1,940 537
Emerging Market Corporate Bond Fund Remuneration Code Staff 117 707
of which
Senior Management (4) 30 7
Other Code Staff (5) 87 700
Euro Corporate Bond Fund
Euro Corporate Bond Fund 1,953 1,855
of which
Fixed Remuneration 1,953 883
Variable Remuneration 1,940 972
Euro Corporate Bond Fund Remuneration Code Staff 117 916
of which
Senior Management (4) 30 169
Other Code Staff (5) 87 747
Euro High Yield Bond Fund
Euro High Yield Bond Fund 1,953 378
of which
Fixed Remuneration 1,953 180
Variable Remuneration 1,940 198
APPENDIX - additional information (unaudited) (continued)
Remuneration Policy
307
As at 30 June 2019
Headcount (1) Total Remuneration
(£’000) (2,3)
Euro High Yield Bond Fund Remuneration Code Staff 117 187
of which
Senior Management (4) 30 35
Other Code Staff (5) 87 152
Global Corporate Bond Fund
Global Corporate Bond Fund 1,953 6
of which
Fixed Remuneration 1,953 3
Variable Remuneration 1,940 3
Global Corporate Bond Fund Remuneration Code Staff 117 3
of which
Senior Management (4) 30 1
Other Code Staff (5) 87 2
Global High Yield Bond Fund
Global High Yield Bond Fund 1,953 241
of which
Fixed Remuneration 1,953 115
Variable Remuneration 1,940 126
Global High Yield Bond Fund Remuneration Code Staff 117 119
of which
Senior Management (4) 30 22
Other Code Staff (5) 87 97
Strategic Bond Fund
Strategic Bond Fund 1,953 32
of which
Fixed Remuneration 1,953 13
Variable Remuneration 1,940 19
Strategic Bond Fund Remuneration Code Staff 117 18
of which
Senior Management (4) 30 3
Other Code Staff (5) 87 15
Total Return Bond Fund
Total Return Bond Fund 1,953 758
of which
Fixed Remuneration 1,953 376
Variable Remuneration 1,940 382
Total Return Bond Remuneration Code Staff 117 339
of which
Senior Management (4) 30 75
Other Code Staff (5) 87 264
APPENDIX - additional information (unaudited) (continued)
Remuneration Policy (continued)
308
As at 30 June 2019
Headcount (1) Total Remuneration
(£’000) (2,3)
Asian Dividend Income Fund
Asian Dividend Income Fund 1,953 470
of which
Fixed Remuneration 1,953 207
Variable Remuneration 1,940 263
Asian Dividend Income Fund Remuneration Code Staff 117 287
of which
Senior Management (4) 30 33
Other Code Staff (5) 87 254
Asian Growth Fund
Asian Growth Fund 1,953 67
of which
Fixed Remuneration 1,953 24
Variable Remuneration 1,940 43
Asian Growth Fund Remuneration Code Staff 117 54
of which
Senior Management (4) 30 2
Other Code Staff (5) 87 52
Euroland Fund
Euroland Fund 1,953 2,642
of which
Fixed Remuneration 1,953 928
Variable Remuneration 1,940 1,714
Euroland Fund Remuneration Code Staff 117 1,711
of which
Senior Management (4) 30 169
Other Code Staff (5) 87 1,542
European Growth Fund
European Growth Fund 1,953 140
of which
Fixed Remuneration 1,953 52
Variable Remuneration 1,940 88
European Growth Fund Remuneration Code Staff 117 91
of which
Senior Management (4) 30 9
Other Code Staff (5) 87 82
Japan Opportunities Fund
Japan Opportunities Fund 1,953 265
of which
Fixed Remuneration 1,953 90
Variable Remuneration 1,940 175
Japan Opportunities Fund Remuneration Code Staff 117 246
of which
Senior Management (4) 30 3
Other Code Staff (5) 87 243
APPENDIX - additional information (unaudited) (continued)
Remuneration Policy (continued)
309
As at 30 June 2019
Headcount (1) Total Remuneration
(£’000) (2,3)
Pan European Dividend Income Fund
Pan European Dividend Income Fund 1,953 6
of which
Fixed Remuneration 1,953 2
Variable Remuneration 1,940 4
Pan European Dividend Income Fund Remuneration Code Staff 117 4
of which
Senior Management (4) 30 0
Other Code Staff (5) 87 4
Pan European Equity Fund
Pan European Equity Fund 1,953 1,330
of which
Fixed Remuneration 1,953 605
Variable Remuneration 1,940 725
Pan European Equity Fund Remuneration Code Staff 117 745
of which
Senior Management (4) 30 105
Other Code Staff (5) 87 640
US Growth Fund
US Growth Fund 1,953 213
of which
Fixed Remuneration 1,953 129
Variable Remuneration 1,940 84
US Growth Fund Remuneration Code Staff 118 199
of which
Senior Management (4) 30 3
Other Code Staff (5) 88 196
Asia-Pacifi c Property Equities Fund
Asia-Pacifi c Property Equities Fund 1,953 161
of which
Fixed Remuneration 1,953 74
Variable Remuneration 1,940 87
Asia-Pacifi c Property Equities Fund Remuneration Code Staff 117 119
of which
Senior Management (4) 30 8
Other Code Staff (5) 87 111
APPENDIX - additional information (unaudited) (continued)
Remuneration Policy (continued)
310
As at 30 June 2019
Headcount (1) Total Remuneration
(£’000) (2,3)
Biotechnology Fund
Biotechnology Fund 1,953 8
of which
Fixed Remuneration 1,953 3
Variable Remuneration 1,940 5
Biotechnology Fund Remuneration Code Staff 117 6
of which
Senior Management (4) 30 1
Other Code Staff (5) 87 5
China Fund
China Fund 1,953 235
of which
Fixed Remuneration 1,953 95
Variable Remuneration 1,940 140
China Fund Remuneration Code Staff 117 141
of which
Senior Management (4) 30 17
Other Code Staff (5) 87 124
Global Equity Income Fund
Global Equity Income Fund 1,953 7
of which
Fixed Remuneration 1,953 3
Variable Remuneration 1,940 4
Global Equity Income Fund Remuneration Code Staff 117 5
of which
Senior Management (4) 30 1
Other Code Staff (5) 87 4
Global Multi-Asset Fund
Global Multi-Asset Fund 1,953 135
of which
Fixed Remuneration 1,953 60
Variable Remuneration 1,940 75
Global Multi-Asset Fund Remuneration Code Staff 117 70
of which
Senior Management (4) 30 12
Other Code Staff (5) 87 58
APPENDIX - additional information (unaudited) (continued)
Remuneration Policy (continued)
311
As at 30 June 2019
Headcount (1) Total Remuneration
(£’000) (2,3)
Global Natural Resources Fund
Global Natural Resources Fund 1,953 9
of which
Fixed Remuneration 1,953 5
Variable Remuneration 1,940 4
Global Natural Resources Fund Remuneration Code Staff 117 6
of which
Senior Management (4) 30 1
Other Code Staff (5) 87 5
Global Property Equities Fund
Global Property Equities Fund 1,953 588
of which
Fixed Remuneration 1,953 240
Variable Remuneration 1,940 348
Global Property Equities Fund Remuneration Code Staff 117 363
of which
Senior Management (4) 30 41
Other Code Staff (5) 87 322
Global Sustainable Equity Fund
Global Sustainable Equity Fund 1,955 2
of which
Fixed Remuneration 1,955 1
Variable Remuneration 1,942 1
Global Sustainable Equity Fund Remuneration Code Staff 115 1
of which
Senior Management (4) 28 0
Other Code Staff (5) 87 1
Global Technology Fund
Global Technology Fund 1,952 222
of which
Fixed Remuneration 1,952 91
Variable Remuneration 1,939 131
Global Technology Fund Remuneration Code Staff 118 128
of which
Senior Management (4) 31 20
Other Code Staff (5) 87 108
APPENDIX - additional information (unaudited) (continued)
Remuneration Policy (continued)
312
As at 30 June 2019
Headcount (1) Total Remuneration
(£’000) (2,3)
Japanese Smaller Companies Fund
Japanese Smaller Companies Fund 1,953 756
of which
Fixed Remuneration 1,953 358
Variable Remuneration 1,940 398
Japanese Smaller Companies Fund Remuneration Code Staff 117 556
of which
Senior Management (4) 30 36
Other Code Staff (5) 87 520
Pan European Alpha Fund
Pan European Alpha Fund 1,953 1,457
of which
Fixed Remuneration 1,953 384
Variable Remuneration 1,940 1,073
Pan European Alpha Fund Remuneration Code Staff 117 1,041
of which
Senior Management (4) 30 78
Other Code Staff (5) 87 963
Pan European Property Equities Fund
Pan European Property Equities Fund 1,953 623
of which
Fixed Remuneration 1,953 254
Variable Remuneration 1,940 369
Pan European Property Equities Fund Remuneration Code Staff 117 384
of which
Senior Management (4) 30 43
Other Code Staff (5) 87 341
Pan European Smaller Companies Fund
Pan European Smaller Companies Fund 1,953 1,174
of which
Fixed Remuneration 1,953 402
Variable Remuneration 1,940 772
Pan European Smaller Companies Fund Remuneration Code Staff 117 768
of which
Senior Management (4) 30 74
Other Code Staff (5) 87 694
1. This is the actual number of employees who are fully or partly involved in the activities of Janus Henderson Horizon. No attempt has
been made to apportion the time spent specifi cally in support of Janus Henderson Horizon Fund as this data is not captured as part of
Janus Henderson Group plc‘s normal processes.
2. Please note that due to the employment structure and resourcing of the Janus Henderson Group plc, the staff indicated in this table may
provide services to other companies in the Janus Henderson Group plc.
3. The remuneration disclosed is only in respect of the provision of services to Janus Henderson Horizon Funds for the year, rather than
APPENDIX - additional information (unaudited) (continued)
313
As at 30 June 2019
the total remuneration for the year – for this purpose, remuneration has been apportioned between the provision of services to Janus
Henderson Horizon Funds and to other entities in the Janus Henderson Group, as follows:
- in respect of performance fee incentives, 100% of any direct allocations of performance fees generated within each of funds;
- in respect of fi xed pay and annual/long term incentive bonuses:
• where fi xed pay is directly attributable to each of the funds of Janus Henderson Horizon Funds (for example, fees for Board
members of the funds of Janus Henderson Horizon Funds), 100% of those fees;
• for investment fund managers, pro-rated using the average AUM of the funds of Janus Henderson Horizon Funds managed by the
relevant investment fund manager (as a proportion of the total AUM managed by that individual) as a proxy.
• for other individuals, pro-rated using the average AUM of the funds of Janus Henderson Horizon Fund (as a proportion of the
aggregate average AUM of Janus Henderson Group plc) as a proxy.
4. Senior Management includes the Janus Henderson Executive Committee and other Group Board members and the Board of Janus
Henderson Horizon Fund.
5. Other Code Staff includes all other UCITS Code Staff not covered by the above, including Fund Managers and Risk Management who
manage AUM within the funds.
APPENDIX - additional information (unaudited) (continued)
314
As at 30 June 2019
Eligibility for French ‘Plan d’Epargne en Actions’ (PEA)
A PEA is a French equity savings plan intended to encourage French tax resident individuals to invest in European equities. PEA eligible
funds must invest on a permanent basis at least 75% of their assets in PEA eligible securities issued by companies (i) established in a
Member State of the European Union or in Iceland, Liechtenstein or Norway and (ii) subject to corporate income tax, or an equivalent tax.
Throughout the year 1 July 2018 to 30 June 2019, the funds listed below invested more than 75% of their total net assets in PEA
eligible securities. As at the date of this report, the funds had the following percentage of their total net assets invested in eligible PEA
securities:
Name of sub-fund Proportion of PEA eligible securities as at 30 June 2019
Janus Henderson Horizon Fund - Euroland Fund 93.07%
Janus Henderson Horizon Fund - European Growth Fund 86.25%
Janus Henderson Horizon Fund - Pan European Equity Fund 87.26%
Janus Henderson Horizon Fund - Pan European Smaller Companies Fund 92.41%
Additional Information for Hong Kong Investors
The additional information in this section is for funds which are authorised by the Hong Kong Securities and Futures Commission (SFC) as
at 30 June 2019 to meet the disclosure requirements in Hong Kong.
Note: SFC authorisation is not a recommendation or endorsement of a product, nor does it guarantee the commercial merits of a product or
its performance. It does not mean the product is suitable for all investors nor is it an endorsement of its suitability for any particular investor
or class of investors.
As at 30 June 2019 the following funds are not authorised in Hong Kong and are not available to Hong Kong Residents:
Emerging Market Corporate Bond Fund
Euro High Yield Bond Fund
Global High Yield Bond Fund
Strategic Bond Fund
Total Return Bond Fund
Pan European Dividend Income Fund
US Growth Fund
Biotechnology Fund
Global Multi-Asset Fund
Global Natural Resources Fund
Global Sustainable Equity Fund
APPENDIX - additional information (unaudited) (continued)
315
As at 30 June 2019
APPENDIX - additional information (unaudited) (continued)
APPENDIX - additional information (unaudited) (continued)
317
Janus Henderson Horizon Fund (the ‘Company’) is an open-ended investment company incorporated in Luxembourg as a Société
d’Investissement à Capital Variable (SICAV) on 30 May 1985 and is a recognised collective investment scheme for the purposes of Section
76 of the United Kingdom Financial Services Act 1986. Potential investors in the United Kingdom are advised that the protections aff orded
by the United Kingdom regulatory system will not apply to an investment in the Company and that compensation will not be available under
the Financial Services Compensation Scheme.
The Company provides a simple and cost eff ective way of investing in world equity and bond markets and through its twenty seven funds,
provides investors with access to twenty one equity funds and six bond funds.
Applications for shares may be made on any business day in Luxembourg to the Registrar and Transfer Agent between 9.00am and
6.00p.m. (local time), or to the Principal Distributor in London between 9.00am and 5.00pm (local time). Applications should be made
on the application form circulated with the prospectus or by fax, telephone or in writing and may be made in any major currency. If you are
sending applications by fax, you should also subsequently send the original form by post. Applications are accepted by telephone only from
existing investors who have previously been issued with a Personal Service Number.
For full information, including a copy of the prospectus and the Key Investor Information Document (KIID), please write to the Registrar
and Transfer Agent or Distributor at the addresses shown on page 2. Alternatively, visit the Company website:
www.janushenderson.com/horizon.
Please remember that past performance is not necessarily a guide to future performance. The value of an investment and the income
from it can fall as well as rise as a result of market and currency fl uctuations and you may not get back the amount originally invested.
Tax assumptions may change if the law changes and the value of tax relief will depend upon individual circumstances. Please refer to the
prospectus for information on the Janus Henderson Horizon Fund.
General Information
Past performance may not be a reliable guide to future performance. The value of an investment and the income from it can fall as well as rise signifi cantly.
Tax assumptions and reliefs depend upon an investor’s particular circumstances and may change if those circumstances or the law change. Please refer to the
Prospectus and the key investor information document for further information on the Janus Henderson Horizon Fund.
Issued by Janus Henderson Investors. Janus Henderson Investors is the name under which investment products and services are provided by Janus Capital International Limited
Henderson Equity Partners Limited (reg. no.2606646), (each registered in England and Wales at 201 Bishopsgate, London EC2M 3AE and regulated by the Financial Conduct
Authority) and Henderson Management S.A. (reg no. B22848 at 2 Rue de Bitbourg, L-1273, Luxembourg and regulated by the Commission de Surveillance du Secteur Financier).
A copy of the fund’s prospectus, key investor information document, articles of incorporation, annual and semi-annual reports can be obtained free of cost from the local offi
ces of Janus Henderson Investors: 201 Bishopsgate, London, EC2M 3AE for UK, Swedish and Scandinavian investors; Via Dante 14, 20121 Milan, Italy, for Italian investors
and Roemer Visscherstraat 43-45, 1054 EW Amsterdam, The Netherlands for Dutch investors; and the fund’s: Austrian Paying Agent Raiffeisen Bank International AG,
Am Stadtpark 9, A-1030 Vienna; French Paying Agent BNP Paribas Securities Services, 3, rue d’Antin, F-75002 Paris; German Information Agent Marcard, Stein & Co,
Ballindamm 36, 20095 Hamburg; Belgian Financial Service Provider CACEIS Belgium S.A., Avenue du Port 86 C b320, B-1000 Brussels; Spanish Representative Allfunds
Bank S.A. Estafeta, 6 Complejo Plaza de la Fuente, La Moraleja, Alcobendas 28109 Madrid; In Singapore: Janus Henderson Investors (Singapore) Limited, 138 Market Street,
#34-03/04 CapitaGreen, Singapore 048946; or Swiss Representative BNP Paribas Securities Services, Paris, succursale de Zurich, Selnaustrasse 16, 8002 Zurich who are
also the Swiss Paying Agent. RBC Investor Services Trust Hong Kong Limited, a subsidiary of the joint venture UK holding company RBC Investor Services Limited, 51/F Central
Plaza, 18 Harbour Road, Wanchai, Hong Kong, Tel: +852 2978 5656 is the fund’s representative in Hong Kong.
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